The eventual return of Wall Street’s trading and operations executives to their physical offices as the coronavirus pandemic subsides could end up being a cause for litigation and employee angst, rather than celebration, if C-suite executives don’t carefully balance profit-making with worker safety.
Knowing when employees can come back to work is the easiest part of the task– just follow state guidelines for when businesses can be reopened depending on whether they are essential. Georgia and Texas are leading the way in letting businesses shuttered by the pandemic begin partially opening while New York State is planning to phase in return to work on a regional basis as of May 15. New York City, the epicenter of the pandemic in the US, will be left last. The phase-in approach is also taking place overseas as there are differing levels of the coronavirus outbreak and varying government mandates.
Ramping up operations while following federal and state laws will be the bigger challenge given the vast number of employees working remotely and the lack of legal precedent. A report just issued by Boston-based research firm Aite Group based on 307 respondents to an April survey of financial service and tech firms across the globe shows that 95 percent are now working from home compared to only 31 percent before the pandemic. “Reopening means a gradual process of deciding who needs to come to work and who can continue to work from home,” says Robert Fisher, a partner in the labor and employment department of the law firm of Seyfarth Shaw in Boston. Federal and state health recommendations apply as do the Americans With Disabilities Act (ADA), Fair Labor Standards Act, the Occupational Safety and Health Act (OSH Act), federal and state discrimination laws and data privacy statutes. All chief executive officers and other C-level executives can do to avoid potential litigation is count on their legal counsel to interpret how they should follow federal and state regulations as they relate to the pandemic.
Large global financial institutions have already been developing plans to gradually return employees to offices after almost two months of working either remotely or from home. Traders tell FinOps Report that they are the first employees called back as they are the revenue generators who have to keep a watchful eye on market volatility. Some are already working at the office. Customer call center employees are next in line as offshore facilities have been shut down. Among the two dozen operations managers contacted by FinOps Report, middle office collateral managers say they are the ones who will likely be returning to the office first to handle the soaring rise in margin calls due to market volatility. Missing a margin call is far worse than failing to settle a trade on time. A failed settlement can be corrected for a price, but a missed margin call for an uncleared swaps transaction could cause a multimillion dollar deal to be unwound.
Once employers come up with a strategy for which workers will be called upon to return and when, they will have to figure out what to do with individuals who say that they don’t want to return to the office because they are worried about catching the coronavirus. The ADA requires employers to make a “reasonable accommodation”, which in the case of the coronavirus pandemic could mean working from home. However, the requirement is not absolute. “An employee’s concern might be legitimate if he or she has a pre-existing condition that puts him or her at a higher chance for falling ill, but it isn’t legitimate just because the employee does not want to return to the office,” says Cindy Schmitt Minniti, a partner in the employment practice of Reed Smith in New York.
Whatever decisions an employer makes, it has to be cautious to not fall afoul of discrimination laws. “Employees can sue for actions that have a disparate impact on workers of a certain race, sex, or other protected class even if the employer doesn’t discriminate intentionally or is seeking to protect an employee,” says Minniti. “All older employees shouldn’t be asked to stay home simply on the basis that they are at a higher risk category for catching the virus.” Minniti’s recommendation: carefully document the reason an employee was asked to return.
Employers also need to be extra cautious about just how far they can push employees to work from home. The Fair Labor Standards Act and state equivalents say that employees classified as “non-exempt” who earn hourly wages must be paid overtime for each hour they work over 40 hours. The sudden shift to tele-work has made it more difficult for employers to keep track of remote work, leading some employment attorneys to predict class-action lawsuits alleging workers didn’t receive fair pay. Although even lower- level trade operations and post-trade operations staff might fall under the “exempt category” for hourly wages, that might still not prevent them from filing class-action lawsuits if employers push their limits.
Aite Group’s report shows that 41 percent of respondents from the financial services industry are working more hours than previously and 64 percent expect they will continue to do so at least for the next month. “Financial industry leaders should expect that while some team members could come out of the crisis refreshed, some may come out exhausted from the extra work pressure combined with all the stress created by the crisis in their personal lives,” writes Gwenn Bezard, Aite Group’s director of research and consulting. Several traders and operations managers who spoke with FinOps Report confirmed they are “overwhelmed” working at least four extra hours a day with no breaks. No one wanted his or her employer publicly identified, but they include the largest wirehouses and fund management shops.
The next piece of the return to work puzzle employers need to address is rethinking office life. The US Department of Labor’s OSHA has urged employers to follow the Centers for Disease Control and Prevention’s coronavirus safety recommendations and said it will bring enforcement actions under the OSH Act’s general duty clause which requires employers to ensure their workplace is free from recognized hazards that are causing or likely to cause death or serious personal harm. “Employees may have a hard time proving they caught coronavirus at the job since the virus is among the general population,” says Fisher. “If they can establish a connection, employees may be limited to workers compensation which would typically block them from private suits. However, employees could also file administrative complaints to OSHA over unsafe work conditions.”
Documenting all the steps taken to follow federal and state guidelines and posting signs on social distancing protocols and hand-washing are critical to minimizing the risk of liability for employers, says Greg Ewing, a partner at the Potomac Law Group in Washington DC specializing in data privacy and dispute resolution. Employers need to be careful to avoid allegations of gross negligence. Ewing recommends that as a best practice employers should adopt a policy to protect all employees, customers, and anyone else the business interacts with. “The short-term gain from following less stringent policies is not worth the long-term risk to employees, customers or the business,” he says. “Temperature checks at the door are expected to become the norm as will daily self-reporting which require employees to check off whether they have any symptoms of COVID-19 or have been in contact with an infected party. Anyone who has been exposed to an infected person or shows symptoms should self-isolate for 14 days based on the latest CDC guidance.”
Given that social distancing requirements will also apply, it is likely that firms will have to rely on a combination of an office redesign and staggered shifts to limit the number of employees physically present at any time. “Separating desks six feet apart and using plexiglass partitions between cubicles or workstations, and marking floors to separate employees are popular solutions,” says Denise Drake, chair of the labor and employment law department of Polsinelli in Kansas City, Missouri. Some firms are also considering hiring “elevator monitors” to ensure that not too many people enter an elevator concurrently.
Once in the office, employees might someday use applications on their smartphones designed to notify them when too many co-workers are approaching their space. Staggered shifts could reflect different hours during the same day or a combination of one or two days at the office with the remainder at home. One-on-one meetings will likely be kept to a minimum while larger office conferences will remain virtual. Several traders who spoke with FinOps Report on the condition their firms not be identified say that they have been told they will be working in shifts. The same applies to operations managers. Their bigger concern is to what extent their firms will be able to accommodate social distancing based on their firms’ office space. According to media reports, Goldman Sachs has said that most offices will remain at 50 percent capacity to allow for more space between employee desks. Goldman has already returned some staff to its offices in Hong Kong, Israel and Sweden, but will take longer to do so in London and New York.
Legal experts caution that employers must be prepared for the possibility that even the best-crafted strategy might not be enough to prevent an employee from catching the virus. “The employer will have to trace the employee’s steps and notify colleagues who might have worked in the vicinity or been in direct contact with the employee that they may be at risk for catching the coronavirus and should stay home,” says Drake. “The employer may also decide to shut down the entire office or part of the office until the appropriate cleaning can be done.” Of course, data privacy rights apply, so the employer can’t disclose the employee’s identity.
For employees who have recuperated from the coronavirus, the firm’s decision on when they can come back to the office is a bit problematic. “While employers are permitted to ask for a doctor’s note certifying the employee’s fitness for duty, this may be unfeasible given the burden on the healthcare system,” says Fisher. “The best option may be to follow the CDC’s guidelines that the individual must be fever-free for three days without fever-reducing medications. Local health authorities can also be contacted for guidance.” It remains to be seen how widely testing for coronavirus antibodies will be used as a metric for returning employees to the office given the uncertainty of the results and the lack of widespread testing abilities.
Since firms will be handling so much new information about their workers, following data privacy laws is critical as there is an increased focus on protecting sensitive health information. Firms which already had a good privacy program in place before the coronavirus pandemic stand a better chance of successfully fending litigation for data privacy breaches. “What the coronavirus pandemic may unfortunately cause to come to the forefront is that many organizations don’t have proper data security, good access controls and a strong culture of protecting personal information with well documented processes and good retention policies,” says Constantine Karbaliotis, counsel at nNovation in Ottawa, Canada specializing in data privacy. “Regardless of the state of the data privacy program all employers should review and follow guidance at the national and state level to defend themselves.”
As a rule of thumb, employers should keep information only if they have a valid business reason to so and only for as long as necessary. “Data on temperature checks on most other symptoms will likely not need to be retained, but information on risk and or disability determination and resulting actions– such as requiring an individual to continue to work remotely for two weeks or specific accommodations — might be,” says Doron Goldstein, co-head of the data privacy and cybersecurity practice at the law firm of Katten Muchin Rosenman in New York. The US Employment Opportunity Commission and US Department of Health and Human Services have recommended that such information be kept separate from personnel records in medical files, but have provided no guidance on how long it should be stored or when it should be deleted.
The right of an employee to request that any of his or her personal information be deleted is not absolute even under California’s new data privacy law and Europe’s General Data Protection Regulation. “In many instances, the employer can reasonably determine that there is a need to keep information as in the case of litigation, medical or insurance claims,” says Goldstein. At the very least, says Karbaliotis, the information will have to be kept for the duration of the pandemic.
A bill now before the US Senate called the COVID Consumer Data Protection Bill outlines protections for personal information, particularly health, geolocation and proximity data, which may alter organizational requirements regarding the use of contact tracing and other technologies to monitor the spread of COVID-19. The legislation, if adopted, would require companies to obtain affirmative express consent from individuals to collect, process or transfer their personal health, geolocation or proximity information to track the spread of COVID-19. Companies must also allow individuals to opt out of the collection process and to delete or de-identify all personally identifiable information when it is no longer being used for the COVID-19 public health emergency.
What should employers do after the pandemic is over? Nobody is willing to predict when it will be over, but for the short-term firms will need to be careful. “Barring an effective vaccine, there could be ebbs and flows of the pandemic so employers will have to be flexible enough to deal with the continual flux of guidance and legal interpretations,” says Potomac Law Group’s Ewing.