Virginia Federal Court Dismisses Employee’s COVID-19-Related Wrongful Termination Lawsuit

For Virginia employers, 2020 has turned their world upside down between the complicated issues arising from the coronavirus pandemic and a wave of new state employment laws.  However, a recent decision issued in the United States District Court for the Eastern District of Virginia lends some support to employers exercising discretion and caution in this time of unprecedented health risks.  On November 12, 2020, the Court dismissed a plaintiff’s wrongful termination claim against his former employer after he was fired for “gross insubordination” related to his and his family member’s COVID-19 status.  The Court’s decision brought a swift end to the lawsuit where the terminated plaintiff sought nearly a half-million dollars in damages.

Things all started in late March 2020 when the employer, Enterprise Leasing Company of Norfolk/Richmond, LLC, was informed by an anonymous source that the employee, Christopher Wells, had been exposed to a family member who tested positive for COVID-19.  Apparently, Wells had not disclosed this fact to any Enterprise supervisor or manager.  When Enterprise contacted Wells to discuss the allegations, Wells indicated that he planned to see a doctor the following week on his day off.  However, when Enterprise asked that Wells keep them informed as to his and his family member’s COVID-19 test results, Wells flatly refused.  Five days later, Enterprise terminated Wells for insubordination based on his refusal to provide medical test results and information for himself and his family member.  Wells filed suit against Enterprise seeking compensatory and punitive damages.

Wells claimed that Enterprise violated Virginia law by terminating him for his refusal to engage in a criminal violation of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). His theory was that HIPAA prohibited him from disclosing his family member’s COVID-19 status and any related medical information to Enterprise without the family member’s consent. If Wells were correct about HIPAA’s restrictions, Enterprise’s request would have exposed Wells to potential liability for a fine of up to $50,000 for violating HIPAA.

The Court dismissed Wells’ suit, noting that his claim that he faced criminal liability under HIPAA was unfounded for several reasons. First, neither Enterprise nor Wells are subject to HIPAA.  HIPAA applies to a discrete set of covered entities that includes only Health Law providers, health plans, and Health Law clearinghouses. The Court pointed out that HIPAA does not place any prohibitions on an individual disclosing a family member’s individually identifiable protected health information. The term “individually identifiable health information” is defined as information created or received by a Health Law provider that relates to the person’s past, present, or future physical or mental health or condition, and it either identifies or reasonably could be used to identify the person. The definition is broad enough to include a family member’s COVID-19 test results or the presence of COVID-19 symptoms.

The Court also stated that Wells would not have risked any criminal liability under HIPAA if he disclosed his own COVID-19 test results to Enterprise. This is so because Enterprise did not command or coerce Wells to disclose his medical information.  Nor did they request that Wells supply his family member’s medical information without the family member’s consent. Finally, there was no possibility that Wells could be indirectly liable under HIPAA’s criminal penalties section unless he could show, at a minimum, that Enterprise was engaging in some conspiracy to obtain Wells’ family member’s protected health information and they were attempting to force him to participate in the scheme. Based on the facts, Wells could not prove that.

All told, Wells could not prove that he was terminated for failing to perform a criminal act because he had no proof that Enterprise asked or directed him to violate any criminal law.

Employers should note that unless they fall into the category of HIPAA covered entities, they cannot be held liable for any HIPAA violations when inquiring as to the COVID-19 status of an employee or an employee’s family member. However, employers may find themselves in violation of other laws, including the Americans with Disabilities Act, if they do not take reasonable steps to ensure the confidentiality of employee protected health information.

COVID-19 has certainly thrown its share of curveballs in the labor and employment sector. With the second wave of the virus now in full swing employers should expect more unique challenges in the immediate future. As always, the Vandeventer Black Labor & Employment Law team is available to assist employers in navigating these unchartered legal waters.

This case, Christopher Wells v. Enterprise Leasing Co. of Norfolk/Richmond, LLC, Civil Action No. 2:20-cv-00305-RAJ-LRL (E.D. Va. Nov. 12, 2020), was decided by the Norfolk Division of the U.S. District Court for the Eastern District of Virginia.