Sidkoff, Pincus & Green P.C. Successfully Defends Appeal to the Pennsylvania Supreme Court

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In an opinion issued on June 16, 2020, the Supreme Court of Pennsylvania Eastern District upheld an earlier ruling favoring Tel-Stream Inc. and its owner, Yury Karnei, a subcontractor that services cellular towers. Attorney Gary Green of Sidkoff, Pincus & Green P.C. represented Tel-Stream and Mr. Karnei.

Tel-Stream performed work for the appellant Rullex, a telecommunications construction company. Sometime after commencing the work, Mr. Karnei, on behalf of Tel-Stream, signed a master service agreement and non-competition agreement with Rullex. The non-competition agreement prohibited Tel-Stream from working for Rullex competitors. Mr. Karnei has a limited understanding of English and believed his company was free to perform services for competitors after it finished working for Rullex.

Subsequent to completing the Rullex project, Tel-Stream accepted a job from Invertice, a Rullex competitor. Rullex filed a lawsuit claiming that Mr. Karnei and Tel-Stream had breached the restrictive covenant. Rullex also filed a Motion for Preliminary Injunction to stop Tel-Stream and Mr. Karnei from working. During the initial preliminary injunction litigation, the parties testified that the non-competition agreement had been signed at a minimum months after Tel-Stream began working for Rullex. Attorney Gary Green argued that since the non-competition agreement was signed after Tel-Stream began working, and Rullex did not pay Tel-Stream additional consideration, then the non-competition agreement was unenforceable.

The Philadelphia Court of Common Pleas ruled in Tel-Stream’s favor, however, Rullex appealed to the Pennsylvania Superior Court. After the Superior Court ruled in Tel-Stream’s favor, Rullex then appealed to the Pennsylvania Supreme Court. In the Pennsylvania Supreme Court’s decision, Chief Justice Saylor wrote that the Common Pleas Court had acted properly in denying Rullex the motion for injunctive relief because Rullex failed to present evidence that Tel-Stream understood and accepted the terms of the non-competition agreement at the time it started working for Rullex.

Philadelphia Restrictive Covenant Lawyers at Sidkoff, Pincus & Green P.C. Help Clients with Non-Compete Agreements

 Non-compete and non-disclosure agreements are the two most common types of restrictive covenants that employers use to protect their business interests. It is not unusual, however, for questions to arise regarding the legality of restrictive covenants. The skilled Philadelphia restrictive covenant lawyers at Sidkoff, Pincus & Green P.C. are familiar with the nuances of these agreements and have been at the forefront of precedents established by Pennsylvania courts. If you have concerns about your restrictive covenant agreement, please call us at 215-574-0600 or contact us online for an initial consultation. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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Landmark Supreme Court Ruling Prohibits Discrimination Against LGBTQ Workers

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On June 15, 2020, the U.S. Supreme Court issued a landmark ruling declaring that Title VII of the Civil Rights Act of 1964 unequivocally applies to homosexual and transgender workers. Although about half of the states in the U.S. have laws protecting the rights of LGBTQ citizens in the workplace, this historic decision clarifies that discrimination on the basis of sexual orientation is prohibited nationwide. Title VII of the Civil Rights Act of 1964 protects workers against discrimination during any phase of the employment process, including recruiting, hiring, training, assigning tasks, compensation, promotion, and firing.

According to the Williams Institute of the UCLA School of Law, more than eight million Americans in the workforce identity as LGBTQ, and nearly four million of them live in states that lack laws to protect them from workplace discrimination.

In writing the 6-3 opinion, Justice Neil Gorsuch noted that sex plays a necessary role in the decision, which is exactly what Title VII forbids. In Title VII of the Civil Rights Act of 1964, Congress outlawed discrimination in the workplace on the basis of race, color, religion, sex, or national origin.

Cases Considered by the Court

 The Supreme Court ruling considered several cases brought to the U.S. Court of Appeals for the Eleventh Circuit where employers admitted to firing employees because they were homosexual or transgender. These cases included:

  • Bostock v. Clayton, County, Georgia: Gerald Bostock worked as a child welfare advocate. Under his leadership, the county won national awards for its accomplishments. After Mr. Bostock began participating in a gay recreational softball league, he was fired for conduct “unbecoming” to a county employee.
  • Altitude Express, Inc. v. Zarda: Donald Zarda was employed by Altitude Express for several seasons as a skydiving instructor. He was fired several days after mentioning at work that he was gay.
  • G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission: Aimee Stephens worked at Harris Funeral Homes Inc. in Michigan. While undergoing treatment for depression, he was diagnosed with gender dysphoria and began exploring the prospect of transitioning. After six years of service with the funeral home, Stephens wrote a letter to management explaining that she planned to live and work full-time as a woman. She was subsequently fired.

Each employee filed a lawsuit alleging unlawful discrimination on the basis of sex under Title VII. The employers in each of these cases did not attempt to deny that they fired these employees for being gay or transgender. Rather, they contended that Title VII does not apply to discrimination on the basis of being homosexual or transgender. Also, the employers argued that the legislators who drafted Title VII would not have expected the law to prohibit discrimination against homosexual or transgender persons.

In response, Justice Gorsuch wrote that while those who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result, Title VII has been expanded in the past to protect the rights of pregnant employees or men subjected to harassment at work. Therefore, Title VII can be interpreted so as to protect the rights of LGBTQ employees.

Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Defend the Rights of LGBTQ Workers

The Supreme Court has made it illegal to discriminate against LGBTQ employees in the workplace. If you or someone you know endured discrimination at work during any phase of employment, contact the experienced Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C. We will defend your rights to the fullest extent of the law. Call us at 215-574-0600 or fill out our contact form to schedule an initial consultation. We represent workers throughout Pennsylvania and New Jersey from our Philadelphia office.

Philadelphia Employers Banned from Requesting Salary History from Applicants

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According to a recent federal appeals court ruling, employers in Philadelphia may no longer request salary history information from job applicants. The U.S. Court of Appeals for the Third Circuit partially reversed a lower court’s 2018 decision that allowed employers to ask about salary history but prohibited them from using the information to determine an employee’s new salary.

In 2017, the Greater Philadelphia Chamber of Commerce sued the city, arguing that the Philadelphia law violated the employer’s First Amendment rights. Mayor Jim Kenney, and others who supported the law, said that the practice of requesting a salary history perpetuates the cycle of discrimination resulting in women with lower salaries than men. In fact, studies show that women make only 80 cents for every dollar that a man earns, despite the fact that women make up close to 50 percent of the workforce and are the sole or co-breadwinner in half of families in this country who have children. For women of color, this gap is even higher. They are hopeful that this recent ruling will put an end to that cycle.

Law Expected to be Enforced Soon

It is unclear when city officials will begin enforcing the new law, but it will likely be soon, as they have been given the green light to do so. The law will be enforced by the Philadelphia Commission on Human Relations, and employers who violate the law may face steep fines and litigation. The Chamber of Commerce claims that the law makes it more difficult for companies to determine what a competitive salary offer should be, particularly in such a tight labor market. Although the Chamber can petition the U.S. Supreme Court to review the decision, it is unlikely that it will be overturned.

According to the Philadelphia Commission on Human Relations, Philadelphia has implemented a number of work-protection legislation in recent years. This latest law is about equality and protecting people’s rights. People have argued that the law will not solve the problem of wage inequality, said a former city councilman, but there is no way to know that unless the law is given a chance.

Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Assist Clients with Employment Issues

 If a prospective employer requested to see your salary history during the interview process, this is a violation of your rights. The Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C. have a proven track record in reaching successful outcomes for clients who have a range of employment issues, including those related to fair compensation. To schedule an initial consultation, call us today at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

What is the Department of Labor’s Final Rule on Joint Employer Status?

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In an effort to avoid liability issues, the U.S. Department of Labor (“DOL”) recently updated its joint labor employment status under the Fair Labor Standards Act (“FLSA”). The DOL published its Final Rule in the Federal Register on January 16, 2020, and it was expected to be effective on March 6th. Prior to the ruling, the tests used by the circuit courts to determine joint employer status were inconsistent and confusing, and they often resulted in increased litigation costs for employers. The Final Rule is considered a positive development for employees and the business community.

Highlights of the Final Rule

The FLSA states that an employee of one company may be considered a joint employee of a second company, depending on how much control the employer of the second business has over the employee’s work. As a result, the joint employer may be held jointly liable for minimum wage or overtime payments to non-exempt workers. The Final Rule uses a four-factor balancing test to determine joint employer status in situations in which another employer benefits from an employee’s work. To determine whether a second company is a joint employer, the DOL will consider the following factors:

  • The employer hires or fires the employee
  • The employer is responsible for supervising and controlling the employee’s work schedule or conditions of employment to a substantial degree
  • The employer determines the rate and method of payment
  • The employer is responsible for maintaining the worker’s employment records

The Final Rule states that joint employer status will not be based on one single factor, and the weight given to one of these factors will depend on the specific scenario. In addition, the extent to which an employee depends on a potential joint employer financially will not determine joint employer status unless other factors are involved as well. According to the DOL, the following are factors that are not relevant to determine FLSA joint employer status:

  • The potential joint employer is operating as a franchisor or using a similar business model;
  • The potential joint employer is in compliance with all legal, health, and safety obligations;
  • The potential joint employer’s contractual agreements with the employer require quality control standards to ensure consistent quality of the work, brand, or business reputation; or
  • The potential joint employer provides the employer with an employee handbook, allowing the employer to operate a “store within a store” arrangement, offering an association health plan or retirement plan, jointly participating in an apprenticeship program, or other similar business practices.

Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Assist Clients with Employment Status Issues

The Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C. have a proven track record of litigating all areas of employment law. Our skilled legal team has a thorough understanding of the Final Rule and the impact it has on joint employer status. To schedule an initial consultation with one of our highly experienced employment lawyers, do not hesitate to call us at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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Expansion of Paycheck Protection Program Offers Help for Small Businesses

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The Paycheck Protection Program (“PPP”) initially set aside nearly $350 billion in government-backed forgivable loans to help small businesses stay afloat during the COVID-19 pandemic. The loans were made available to small businesses in operation on February 15, 2020 with fewer than 500 employees. In addition, 501(c)(3) non-profits with fewer than 500 workers and other types of organizations are also eligible. To apply, businesses must work through a bank with which they have a relationship and the bank must be a lender approved by the Small Business Administration (“SBA”).

Studies suggest that 80 percent of small businesses in America missed out on the first round of funding because the money was quickly depleted. At least $310 billion in additional funding has now been approved. However, small businesses still face hurdles in applying for the loans, as well as providing proof that they are spending it within prescribed guidelines for the loans to be forgiven.

Small Businesses Face Challenges in Obtaining PPP Loans

Some of the difficulties faced by small businesses applying for the first round of PPP loans include the following:

  • Many banks were overwhelmed by the initial demand
  • Larger banks tended to take care of their biggest clients first
  • Many small businesses did not have a prior relationship with a lending bank

In addition to allocating the additional $310 billion for PPP loans, a significant portion of that money has been set aside for smaller banks, including community-based lenders and credit unions. The goal is to reach smaller businesses, however, many of them still lack a relationship with a lender. One option is to work with a law firm that can facilitate a relationship.

Meeting PPP Loan Requirements

Some businesses applied for a loan but have not yet received the money. If you are a small business waiting for a PPP loan, do not submit a second application if you already applied. If you applied for a loan and received the money, you must meet the following requirements in order for the money to turn into a grant:

  • You must spend all of the money within eight weeks of depositing it into your business bank account
  • You must allocate 75 percent of the money to cover payroll costs
  • The money cannot be used retroactively to pay past debts

If you cannot meet these and other requirements, you will have to pay the money back within two years at one percent interest. Unfortunately, some small businesses are having difficulty meeting the 75 percent threshold because their workers chose to go on unemployment. Businesses are allowed to give their workers raises or bonuses simply to qualify for the 75 percent payroll threshold, as long as each worker makes less than $100,000 on an annualized basis.

In addition to PPP loans, the SBA also administers the Economic Injury Disaster Loan (EIDL) program. Businesses with 500 or less employees may be eligible if they can show that they were affected by a disaster, such as the COVID-19 pandemic. However, EIDL loans are not forgivable.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Help Small Businesses During the Pandemic

If you are a small business owner impacted by the COVID-19 pandemic and are seeking a loan, the Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. offer trusted legal guidance to help you pursue the best possible course of action. Contact us for an initial consultation by filling out our online form or call us at 215-574-0600. We assist clients throughout Pennsylvania and New Jersey from our office in Philadelphia.

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Why Should I Avoid Copying Another Business’s Contract Language?  

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Every business should have a contract, often called Terms of Use or Privacy Policy, that is specific to their company, and includes detailed information about the parties involved, the goods or services that are being exchanged, and the details of the agreement. Start-up companies or entrepreneurs who are building a business may be tempted to use language from another company’s contract to avoid paying a lawyer to draft a new contract. Tempting as this may be, there are a number of reasons why this is highly discouraged. The cost of hiring a lawyer to generate a business contract will save you money in the long run and protect your company from lawsuits or regulatory investigations.

Reasons Why Copying a Contract is Discouraged

  • Bad Publicity: Negative media attention can be very damaging to a small company. Depending on how small the company is, it may not survive the bad publicity. A company can run into trouble if the contract they copied was drafted to comply with laws from another jurisdiction. In addition, it could be out of date or include protections for goods or services that are different from those provided by your company. This could leave the company vulnerable to lawsuits.
  • It could scare off investors: Potential investors may walk away if they find out that your company is involved in a lawsuit or is being investigated by state or federal regulators.
  • A strong contract distinguishes you from the competition: The terms and conditions of a contract should reflect the company’s mission and values. It does not need to contain complicated legal jargon. In fact, the best contracts are easy to read and understand, legally accurate, and on brand.
  • Copying a contract is illegal. Copying another company’s contract without their permission is a violation of copyright law. It also sets an example within the company that it is acceptable to break the rules.
  • The company’s entire user agreement could be invalidated. If it is discovered that a company copied another company’s legal contract, it could invalidate the contract and leave the company vulnerable to steep fines, class action lawsuits, and put the future of the organization at risk.

There are contract templates available online. However, they are often written by individuals who do not have a legal degree and are unqualified to write a business contract. Therefore, it is highly discouraged to go this route. Invest the time and money in hiring a business lawyer to draft a legal contract for your company.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Assist Clients with Business Contracts

If you are starting up a new company, or you require assistance with important legal documents for your existing company, do not hesitate to contact the Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. We have extensive experience in drafting business contracts that are concise, legally accurate, and reflect your company’s brand and mission. To schedule a confidential consultation, call us today at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

Terminating a wedding contract in Pennsylvania due to COVID-19 & Coronavirus

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Many couples and venues are having to postpone or even cancel wedding plans because of the effects of the novel Coronavirus on travel, events, and socialization. The starting point for determining your rights would be to look to the contract’s language, which may contain a force majeure or “act of god” clause. Such a clause may explicitly excuse the performance of a wedding venue or vendor, or excuse the bride and groom from the payment terms of the contract. The precise language of the force majeure clause is most important, as it may be read to unambiguously include or exclude events such as COVID-19.  Moreover, there have been legislative efforts to enact laws that would mandate the application of any force majeure clause to apply to the pandemic. To date, state and local governments in Pennsylvania have not enacted such laws.

If the wedding-related contract in question does not include a force majeure clause, or if the clause uses vague language that may not ultimately cover the COVID-19 pandemic, Pennsylvania recognizes two common law doctrines that may be of use: frustration and impossibility.

The doctrine of impossibility applies in the event that a party’s performance was made impracticable through no fault of his own by an unforeseeable event, the non-occurrence of which was a basic assumption of both parties at the time of agreement. Performance will be excused, unless language or circumstances point otherwise. Pennsylvania’s definition of “impossibility” requires strict impracticability. As such, mere unanticipated difficulty is not likely to excuse performance.

Pennsylvania’s frustration of purpose doctrine protects excuses performance even if it is still possible so long as the event substantially frustrates a party’s principal purpose. Additional requirements are the assumption by both parties that the event would not occur and no fault on behalf of the party asserting the application. The ultimate question for frustration is whether the unforeseeable event significantly altered the circumstances of the agreement such that performance would no longer fulfil any aspect of its original purpose.

If you have concerns about how the COVID-19 will impact a wedding contract, the lawyers at Sidkoff, Pincus & Green P.C. can assist you with these matters. To schedule an initial consultation, call us at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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Applying Pennsylvania Law to Contracts without Force Majeure clauses during COVID-19

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There are many questions being raised about whether parties are required to perform under contracts during the COVID-19 health crisis. In some cases, government shutdowns have made performance impossible, and in other cases, health concerns have made performance unwise and impractical.  A force majeure clause is a provision in an agreement that excuses a party from performance if an unforeseeable event arises. This type of clause is also commonly referred to as an “act of god” provision and it is a common starting point for a legal analysis of whether performance will be required due to concerns over COVID-19.  However, what happens if your contract does not contain a force majeure clause?

If your contract is governed by Pennsylvania law, then the courts will likely look to common law, including the doctrine of impossibility and the frustration of purpose doctrine. The doctrine of impossibility applies in the event that a party’s performance was made impracticable through no fault of his own by an unforeseeable event, the non-occurrence of which was a basic assumption of both parties at the time of agreement. Performance will be excused, unless language or circumstances point otherwise. Pennsylvania’s definition of “impossibility” requires strict impracticability. As such, mere unanticipated difficulty is not likely to excuse performance.  Pennsylvania’s frustration of purpose doctrine excuses performance even if it is still possible so long as the event substantially frustrates a party’s principal purpose. Additional requirements are the assumption by both parties that the event would not occur and no fault on behalf of the party asserting the application. The ultimate question for frustration is whether the unforeseeable event significantly altered the circumstances of the agreement such that performance would no longer fulfil any aspect of its original purpose.

If you have concerns about how COVID-19 will impact a contract with or without a force majeure clause, the lawyers at Sidkoff, Pincus & Green P.C. can assist you with these matters. To schedule an initial consultation, call our team at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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Applying Pennsylvania Law to Contracts with Force Majeure clauses during COVID-19  

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The COVID-19 health crisis has led to government mandated shutdowns of non-essential businesses in Pennsylvania for an extended period of time. Further, due to ongoing health concerns, many questions remain about whether parties will be interested in performing under contracts even after stay-at-home and shut-down orders are lifted.  For example, if you have a large event scheduled in August, will you want to hold it even if the Commonwealth permits large gatherings?  If you have these types of questions, and have entered into a written agreement, it is important to determine whether there is a force majeure clause, and to examine it closely.

A force majeure clause is a contract provision that excuses a party from performance if an unforeseeable event arises during the terms of the contract. Commonly, this type of clause is referred to as an “act of god” provision. When drafting force majeure clauses, parties control the contours of the agreement and those contours will dictate the application, effect and scope of the clause. However, generally speaking, the non-performance must have been caused by an unforeseeable event at the time the contract was entered into. In addition, the event must not have been due to any fault or negligence by the parting asserting the application of the clause.

For courts applying Pennsylvania law, they will likely also look to see whether performance has been made impossible, not simply impractical. In Sunseri v. Garcia & Maggini Co., the Pennsylvania Supreme Court struck down a force majeure clause. The party asserting excusal under the clause did not fulfill its obligations under a contract due to crop failure. Although the contract included crop failure in the force majeure clause, the Court held that application of the clause was not valid due to a partial crop failure, which rendered performance still possible.

COVID-19 is an unprecedented occurrence that many courts have yet to address, particularly as it applies to the enforcement of contracts. The courts in Pennsylvania may apply “act of god” provisions to this pandemic, but that is uncertain and could depend on the contract language.  This could vary on a case-to-case basis, considering the type of contract and material terms of the contract, such as scope in time. If the contract contains broad “act of god” language, then a court is probably more likely to apply the clause versus more specific language defined by the parties themselves. Moreover, there have been legislative efforts to enact laws that would mandate the application of any force majeure clause to apply to the pandemic. To date, state and local governments in Pennsylvania have not enacted such laws.

If you have concerns about how the COVID-19 will impact a contract with or without a force majeure clause, the Philadelphia lawyers at Sidkoff, Pincus & Green P.C. can assist you with these matters. To schedule an initial consultation, call us at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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Coronavirus Outbreak Causes Major Employment Issues in the U.S.

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As the Coronavirus (COVID-19) continues to spread, companies have closed, workers are required to stay home, and travel has been restricted. In addition to the obvious health concerns, COVID-19 is having a major impact on the U.S. economy. As the outbreak continues to impact companies in the U.S. and worldwide, legal experts are urging companies to review their legal contracts, employment agreements, and handbooks to ensure that they are protected from breaches in cybersecurity and other negative exposure.

U.S. companies conduct a significant amount of business with manufacturers in China. However, the outbreak has disrupted the supply chain, causing significant delays in the delivery of contracted goods. U.S companies that are awaiting goods from China should review their business contracts to determine what their rights are if their goods are delivered late, or not at all. However, despite what the contracts say, Chinese suppliers may obtain a force majeure certificate, which exempts exporters from fulfilling contractual agreements with overseas buyers as a result of the pandemic.

Impact of Coronavirus on U.S. Employers

President Trump signed an executive order suspending entry into the United States of all foreign nationals who were in China within 14 days of arriving in the U.S. Immediate family members of U.S. citizens are exempt from the order. Those not exempt are subject to a two-week mandatory quarantine upon their arrival in the U.S. It is unlikely that travelers who contract the virus will receive employment protection, unless they were traveling for business or were subjected to a mandatory quarantine. If this is the case, the U.S. company would be required to continue paying the affected individual.

Symptoms of COVID-19 include fever, nausea, vomiting, diarrhea, shortness of breath, and coughing. If a worker shows any of these signs, and was in an area with confirmed cases of the virus, the employer should immediately contact the communicable disease section of the state department of health. It is imperative that the worker be tested to confirm whether he or she has the coronavirus.

Workers who are returning from China may have be asymptomatic. Employers should consider requesting that the employer remain home for 10 to 14 days until the incubation period has passed. However, if the worker alleges that he or she was forced to stay home, he or she may allege that it was due to a perceived disability, which would be a violation of the Americans with Disabilities Act. If the decision was based on the worker’s travel history, it is unlikely that the employee will be able to defend their claim.

Employers can avoid liability and claims of discrimination by focusing on their travel history, as opposed to their national origin, and paying their workers so they do not suffer damages from missed days of work due to the virus. Employers should try to be accommodating to employees who were quarantined and are reintegrating into the workforce.

Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Assist Employers with Employment Issues Related to the Coronavirus

If you have concerns about how the COVID-19 will impact employment law, the Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C. can assist you with these matters. To schedule an initial consultation, call us at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.