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Covid-19 as the excuse or Pre-text for Layoffs During Pandemic

Yes, many companies have to lay-off many employees at this time purely due to economic reasons due to forced closures during the pandemic. As a general rule, California can fire employees for any reason. However, all (or at least most) employers, know that there are several very notable exceptions that make it illegal to fire employees. During this Pandemic, many employers have been using the Pandemic as an excuse to discriminate and retaliate against many employees by using Covid-19 as the excuse (pre-text) for "legally" laying off employees.

Here are some basic legal issues you should know:

Discrimination Is Illegal

California has laws that prohibit discrimination and retaliation in the workplace. The California Fair Employment and Housing Act is a broad law that prohibits discrimination of employees and applicants. The Department of Fair Employment enforces state laws if employers discriminate against employees or applicants for any of the following reasons:

  • Race

  • Color

  • National origin

  • Sex or gender (Including Pregnancy)

  • Sexual orientation, gender identity, or gender expression

  • Age if over 40

  • Marital status

  • Military or veteran status

  • Medical condition

  • Genetic information

While not all forms of discrimination against employees are illegal, if your employer discriminated against you because of a reason protected by federal or state law or by your employer’s policies, you have every right to seek justice and the law provides you with a legal claim.

If you were recently laid off and you suspect that the actual reason was a discriminatory reason, you may have a claim for illegal discrimination. As the plaintiff in a potential case, you to prove the following:

The Reason Given for Your Layoff was an Excuse (Pretext) for Discrimination

Today, most employers are savvy enough to fire employees with reasonable and legal reasons such as: Covid-19, poor performance, or economic concerns. It's very rare (although this does still happen) to see any employer tell an employee verbally or in writing, some blatantly illegal phrases like:

"Hey, I don't like Asians. For that reason, you're fired." or

"I don't like that you're complaining about our flirtatious and mean manager, you're fired." or

"I don't like that you're making a legal worker's compensation claim for a work injury, you're fired."

Most employers know how to use a legal pretext or justification and instead, tell you that you're terminated because you were late, missed a deadline, or for poor performance, or for economic reasons.

So, many plaintiffs ask, "Then how can I prove my case?"

In all my years of practice, I use this as a simple example: Most criminal convictions are based purely on circumstantial evidence. Getting an employer that admits to firing someone due to their race or sexual orientation is as rare as finding a murderer that will openly admit to it. You file a worker's compensation claim and your employer immediately start showing some hostility by giving your bad shifts, more work, and eventually fires you for being late for 5 minutes when all other employees are regularly late for about 5 minutes but are never fired.

Thus, evidence typically include:

  • timing of your termination with the timing of something you complained about

  • The company made layoffs that disproportionately affected a protected group of people, that includes those of a younger or older age, etc.

  • memos, messages, or e-mails that reveal decisions discussing the drawbacks of hiring certain types of workers based because of race, religion, politics, gender, etc.

  • People of a different composition are hired to take over the laid off workers jobs (such as young people replacing older workers or male Caucasian workers replacing Black workers)

  • employers intentionally create a case against you and focus on you

  • Employers/managers make certain inquiries and remarks to you or others in passing that infer to them taking issue with your protected status. Some examples can be: "Mothers are lazy", "Chinese are not creative", "We can't stand complainers".

You'll be surprised when you sit down and jog your memory and put the timeline together, you will see some classic retaliatory or discriminatory patterns that happen often when employers are trying to cover up an illegal (discriminatory or retaliatory) termination.

Your Damages

If you were illegally fired, your employer will have to pay for all of these:

A. Lost wages & Benefits

Basically, you should be compensated with the wages and benefits you should have earned while working there. If it takes you as much as 1 year to find another job that pays about 10% less, your former employer will be responsible for paying your for 1 year of wages and the 10% difference in the pay you are receiving at your new position. Of course, you need to show that you have been diligently seeking employment the entire time.

B. Pain & Suffering, Mental Distress, Loss or Reputation

Being terminated for an illegal reason is unfair, traumatizing, and demoralizing. Because your employer is discriminatory or retaliatory, they covered it up by terminating all the Chinese and gay employees during Covid-19; or, because your employer is homophobic, they covered up their illegal termination by creating a fake case that your performance was poor. Thus, if you have suffered from injustice of this kind, you should immediately seek medical attention to treat any mental, physical, or emotional medical conditions caused by this trauma. And if you prevail on this matter, you will be able to ask the court or jury to require the employer to pay for all of your medical expenses in addition to the value of the mental distress you suffered.

C. Attorney's Fees

If you claim wins and if you retained an attorney to assist you, you can also file a motion after the judgment to claim the reasonable value of your attorney's fees and costs. In California, there are five main statutes that will allow employees to seek attorney's fees and costs as the winning party.

1. California’s Fair Employment and Housing Act (FEHA) The Fair Employment and Housing Act (FEHA) states: “In civil actions brought under [FEHA], the court, in its discretion, may award to the prevailing party . . . reasonable attorney’s fees and costs, including expert witness fees.” (Gov. Code, § 12965, subd. (b).) Under FEHA, the fee shifting provision goes both ways, to the plaintiff but also potentially the employer. Courts have discretion to award the defendant employer attorney’s fees and costs as the prevailing party in cases where plaintiff’s claim is deemed unreasonable, frivolous, meritless or vexatious. As a California court recently explained:

Despite its discretionary language, however, the statute applies only if the plaintiff’s lawsuit is deemed unreasonable, frivolous, meritless, or vexatious. . . . ‘ “[M]eritless” is to be understood as meaning groundless or without foundation, rather than simply that the plaintiff has ultimately lost his case . . . .’

Robert v. Stanford University, 224 Cal.App4th 67 (2014).

2. Unsuccessful appeal of Labor Commissioner Claim - California Labor Code section 98.2(c)

To discourage appeals from Labor Commissioner rulings, California Labor Code section 98.2(c) requires the court “shall” awards costs and reasonably attorney’s fees to the other party. Employees can be awarded fees when and employer loses an appeal. Conversely, the employer who wins on an unsuccessful appeal by employee can also get attorneys fees awarded. However, with employers, it's very hard for them to be considered successful on appeals. Labor Code section 98.2(c) states that the employee is “successful” and therefore entitled to attorney’s fees “if the court awards an amount greater than zero.” So, even if the employee wins or proves he/she is owed only $0.50, they are considered successful in the appeal, and are entitled to their attorney’s fees. For that reason, employers have a huge disadvantage in appealing Labor Commissioner rulings.

3. Expense reimbursement claims - Labor Code section 2802

Labor Code section 2802(c) provides that the employee is entitled to “attorney’s fees incurred by the employee enforcing the rights granted by this section. This section provides that employers must pay for and reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence” of the employee’s job. Hence, items like mileage reimbursement, cell phones, home internet use, or other out-of-pocket expenditures employees make while performing their job must be reimbursed by the employer.

4. Private Attorney General Act (PAGA) claims Plaintiff’s counsel bringing a PAGA claim can seeks attorney’s fees under this statute as well. See Labor Code section 2699(g). Plaintiffs’ attorneys also claims fees under California Code of Civil Procedure section 1021.5, which permits them to recover fees if the case “resulted in the enforcement of an important right affecting the public interest” if certain requirements are satisfied.

5. Minimum wage/unpaid overtime claims - Labor Code section 1194

This code awards attorneys fees to plaintiffs (employees) that recover damages for minimum wage or overtime violations:

Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action … reasonable attorney’s fees, and costs of suit.

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