Should Businesses Be Protected From COVID-19 Lawsuits When They Reopen?

Many businesses will face uncertainty as they reopen their doors as states lift COVID-19 locksdowns.

How many of their customers will return? How many of their employees will return?

These concerns are not the only ones they have. They might also be worried about potential legal risks that may arise when they restart their business. What kinds of lawsuits could they be facing from customers and employees who believe they were infected while they are working on the business?

The Meatpacking Order and President Trump

The last question about liability risks is one that has been receiving a lot attention in Washington lately. There have been some actions. President Trump’s April 28th action is the most notable.

Trump used his authority under DPA to declare that meatpacking facilities should be open despite COVID-19 strains in many of these plants. He also stated to reporters that he wants to protect the plants from liability if workers want to sue.

The order has been broadly criticized by labor groups, who argue that it further endangers the safety of workers. The suggestion to give legal immunity to meatpacking businesses has sparked a debate about the presidential powers under the DPA to grant broad legal protection.

Trump was not actually “ordering” meatpacking facilities that were closed to be reopened or maintained open by issuing the order. Instead, the order gives authority to Sonny Perdue (secretary of agriculture) to use the DPA powers to keep processing plants open.

“The idea appears to be that Mr. Perdue could use this power to instruct a specific meat producer to allocate its product to grocery wholesalers in line with its existing contracts — thereby bestowing a federal gloss on those arrangements,” the New York Times reported April 30.

Trump’s reference of liability protection was apparently in connection with an April 26th action by the Centers for Disease Control and Occupational Safety and Health Administration. On that day, CDC and OSHA issued an “interim guidance” containing specific safety measures that meat and poultry processing facilities were advised to implement.

This is the idea that producers who follow OSHA/CDC standards would likely reduce their liability risk.

The Emerging Debate in Washington

The U.S. Chamber of Commerce, along with other business organizations, has been lobbying for special business protections for several weeks. Even though these organizations seek legal protections for business, they generally seem to recognize that providing blanket protection is not realistic — wrongdoers must still pay a legal price.

The question is how can we achieve balance? How can we provide protection for businesses from lawsuits that could cause them to be damaged or even destroyed, and justice for workers who may not be able to leave?

Democratic and Republican lawmakers are currently working together on the next COVID-19 relief package. Democrats will be pushing for greater protections for workers. Republicans will try to find ways to protect businesses legally.

Harold H. Kim, president of the U.S. Chamber’s Institute for Legal Reform, has suggested that Centers for Disease Control and state guidelines on social distancing and other measures could be used to identify a legal boundary. He suggested that businesses should follow the guidelines to be immune if they do not.

Many business owners agree with the fact that a blanket exemption is not feasible and that specific rules need to be established to guide both workers, and employers.

Business Can Take Their Own Actions

“If there is no liability on the part of employers without a set of rules by which employers have to abide by, then that means you can have a wild, wild west,” Kent Swig, president of  a privately owned real estate investment and development company, told the Philadelphia Inquirer recently.

Swig explained to the Inquirer that he plans to create one-way lanes through his lobby corridors and Plexiglas partitions between his workspaces. However, he said that he is looking for more guidance.

While the Washington debate has just begun, Noah Feldman, a Harvard Law School Professor, has suggested that both parties should immediately consider what a “safe harbor” for businesses might look. Writing in Bloomberg News on April 27, Feldman said that Congress should direct the Centers for Disease Control to develop specific rules designed to keep workers and customers safe and at the same time provide businesses protection from liability.

He wrote, “This way businesses won’t have to guess which reasonable precautions are.” They will know the rules. They are safe as long they follow the rules. They will be held responsible for any violations of the rules.

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Cyndy Lane

Cyndy is business journalist with a focus on entrepreneurship and small business. With over a decade of experience covering the startup and small business landscape, Cyndy has a reputation for being a knowledgeable, insightful and approachable journalist. She has a keen understanding of the challenges and opportunities facing small business owners and is able to explain them in a way that is relatable and actionable for her readers.