The COVID-19 pandemic has led to a variety of claims brought by employees. Recently-filed cases are taking a new tack; shareholders are bringing derivative suits and securities claims related to companies’ coronavirus responses. These cases generally fall into two categories. The first relates to a company’s failure to implement appropriate safety measures to reduce the risk of infection to employees, customers, or the general public. Shareholders allege that these actions (or inactions) harm the company by reducing its value. The second relates to public statements made by the company regarding its health and safety protocols and its understanding of the impact the virus has had or will have on operations. The harm alleged is that shareholders invested based on false or inaccurate statements by the company.

In our full Alert, we answer ten questions about shareholder derivative suits, including what they are, who they are brought by and against, the theories by which COVID-19 and other employee related shareholder derivative suits are proceeding, and what companies can do to protect themselves.