Lawsuit tests limits of COVID-related employment litigation

A woman claims she was fired for complaining about pay equity. The company says it was because of the pandemic. Who was right?

Paltz, an account executive and a 24-year employee of Alliance HealthCare Services, which is a national provider of outsourced radiology and oncology services, was terminated in early April. (Photo: Shutterstock.com)

Plaintiffs counsel Lawrence Pearson believes his representation of Kristen Paltz in her federal wrongful-termination lawsuit against Alliance HealthCare Services Inc. is just the tip of the iceberg when it comes to some employers using COVID-19 to get rid of employees who have complained about management.

“There is a definite pattern in terminations and layoffs of employees who are seen as troublesome because they have made complaints against their employer. They are often weeded out in these layoffs,” said Pearson, a partner with Wigdor in New York City.

Related: 10 steps to take after a layoff or furlough

Pearson continued: “Managers sense an opportunity, and think they have cover to terminate people because of COVID. We’ve seen this trend during other economic downturns too. Our founding partner, Douglas Wigdor, termed the phrase ‘recessionary discrimination’ to describe this sort of practice.”

Paltz, an account executive and a 24-year employee of the company, which is a national provider of outsourced radiology and oncology services, was terminated in early April. The lawsuit said Paltz was let go along with 37 others out of the company’s 2,700 workers nationwide because of the health pandemic.

Pearson said Paltz, a Westport resident in her 40s, was the only one of 16 account executives in the northeast region who was terminated.

In the federal lawsuit, filed Jan. 8 in Connecticut, Paltz maintains she was let go because she had complained about management on several fronts, including an alleged pay disparity between male and female employees.

Pearson said his client was paid upward of half what some of her male counterparts were paid, “even men with less experience.”

The lawsuit says that at one point, a company vice president berated Paltz for her complaints and told her, “We have made too many accommodations for you.” Pearson noted Paltz was diagnosed with breast cancer 10 years ago and asked that her workweek be limited to four days a week; the company agreed to the request.

Pearson said Paltz also raised concerns about the company’s ethical behavior and complained to management about objections under the Stark Law regarding the company allegedly steering business to sites that it had a financial stake in.

Pearson said he does expect pushback from the company.

“In cases like this, the defendants will try to muddy up the client by nitpicking about their performance or by pleading poverty and saying they had to make lots of other cuts. My client was performing better than many of her peers who were not let go. She was one of the company’s top sales performers to the very end,” Pearson said.

Representing Alliance HealthCare and fellow company defendants Lisa Consiglio and Richard DeVaney are Adam Simons and Rebecca Lineberry of McGuireWoods in Baltimore and New York City, respectively.

Simons issued a statement from Rhonda Longmore-Grund, president and chief executive officer of  Alliance HealthCare.

The statement reads: “As a mission-focused, values-driven organization, we are dismayed by the allegations contained in this lawsuit, and intend to vigorously defend our company and team members named.”

The statement continues: “We serve more than a million patients a year, who are each facing a healthcare injury, illness or cancer. Alliance insists on, and is recognized for, our compassionate care, and for our culture of compliance and integrity, which are supported by a myriad of policies and procedures our team members proudly uphold. … Again, we intend to defend this lawsuit and will not comment further on these allegations at this time.”

Pearson said he’s open to negotiating a settlement, but added he’d go to trial if he has to.

“If we are forced to go to trial, we do believe a jury would find in favor of our client and award damages,” said Pearson, who believes a jury could easily award “in excess of seven figures.”

The lawsuit seeks compensatory, punitive damages, and liquidated damages.

Assisting Pearson is colleague Lindsay Goldbrum and William Madsen of Madsen, Prestley & Parenteau in Hartford.

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