In my recent round-up of the top D&O stories of 2022, one of the stories I identified was the contribution of macroeconomic factors to the filings of securities class action lawsuits during the year. Among the macroeconomic factors I identified, beyond interest rate increases, economic inflation, and supply chain disruption, was the disruption to the labor force following, or perhaps resulting from, the pandemic. A recently filed securities suit shows how these kinds of factors can translate into securities litigation.


National Vision Holdings, Inc. is an optical retailer that provides eye exams, eyeglasses, and contact lenses. An important part of National Vision’s is its ability to recruit and retain specialized staff, particularly optometrists. In early 2020, the pandemic disrupted the company’s business operations. For a brief period, the company closed all of its retail locations. However, by June 2020, the company had reopened its stores. Following the reopening, the company reported improved financial results. The company also cited favorable financial and operating trends, repeatedly raising its guidance.

The subsequently filed securities lawsuit alleges that behind the scenes, the company was struggling to retain sufficient healthcare staff to keep up with surging customer demand. In order to attract and retain sufficient optometrists, the company implemented wage investments, a move that would later impact the company’s reported financial results. However, in November 2021, the company reported disappointing financial results, due in part to the increased wage costs. The company’s share price declined about 13%. The subsequently filed securities suit complaint alleges that in this initial disclosure, the company “failed to disclose the full truth.” The company later discloses its ongoing recruiting and retention difficulties, which resulted in further declines in its reported results.

The Lawsuit

On January 27, 2023, a plaintiff shareholder filed a securities class action lawsuit in the Northern District of Georgia against the company and certain of its directors and officers. A copy of the complaint can be found here. The complaint purports to be filed on behalf of investors who purchased the company’s securities between May 13, 2021 and May 9, 2022.

The complaint alleges that during the class period, the defendants made false and misleading statements or failed to disclose that:

(a) that National Vision was experiencing extraordinary wage and labor pressures as a result of intense competition and disruptions in the labor market due to the COVID-19 pandemic; (b) that National Vision had suffered a severe optometrist shortage in the first quarter of 2022; (c) that the lack of sufficient optometrists to meet customer demand had created an acute exam capacity constraint; (d) that, as a result of (a)-(c) above, the Company was suffering from a decline in net revenue and CSS during the first quarter of 2022; and (e) that, as a result of (a)-(d) above, the Company’s 2022 financial outlook was materially false and misleading and lacked a reasonable factual basis.

The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks to recover damages on behalf of the class.


In addition to being related to macroeconomic factors, as noted at the outset, this new lawsuit also qualifies as COVID-related. In a recent prior post, I had identified another lawsuit as being the first COVID-related securities lawsuit filing of 2023, but this lawsuit was actually filed earlier and so this lawsuit actually is the first COVID-related lawsuit filings of 2023. With the two COVID-related securities suit filings this year, there have now been a total of 63 COVID-related securities suit filings since the initial coronavirus outbreak in the U.S. in March 2020.

But in addition to representing a COVID-related lawsuit, this lawsuit also represents an illustration of the way that disruptive macroeconomic factors can lead to securities litigation. The gist of this complaint is that the company soft-pedaled the impact that the labor force disruption – and in particular, the disruption in the company’s ability to recruit and retain optometrists – was not fully disclosed; the core of the complaint’s allegations is that the company’s increased costs associated with the labor supply disruption were not fully disclosed to investors.

It is probably significant to note in terms of litigation trends tracking that the events described in this complaint took place in late 2021 and early 2022. Because it reflects conditions in a slightly earlier time period, it arguably may not be representative of the ongoing litigation risks, both with respect to the prospects for further COVID-19-related securities litigation and with respect to such macroeconomic conditions as disruption of the labor supply. Nearly a year on from the events described in this complaint, the ongoing labor supply issues may reflect different circumstances, that may or may not translate in the same way to further securities litigation.

Nevertheless, there are ongoing economic circumstances, such as rising interest rates, increasing economic inflation, and the war in Ukraine, that could disrupt company operations and financial performance. To be sure, supply chain and labor supply disruptions could also challenge some companies’ operations and performance as well. In any event, the likelihood is that as the year progresses, we will see further securities litigation filing activity reflecting the various adverse economic circumstances.