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

As states begin to lift COVID-19 lockdowns, many businesses face uncertainties as they open their doors again.

How many of their customers will come back? How many of their employees will come back?

Besides those concerns, they may also be asking themselves about new legal risks that might arise as they resume business. What kind of potential lawsuits could they face from customers and workers who believe they were infected on the business premises after operations resumed?

President Trump and the Meatpacking Order

That last question, about liability risks, is one that’s been getting a lot of attention in Washington lately, and there’s already been some action. The most notable recent example is an action taken by President Trump on April 28.

Citing his authority under the Defense Production Act (DPA), President Trump issued an executive order that meatpacking plants should remain open despite COVID-19 outbreaks in many of them, and told reporters that he is also seeking to protect those plants from liability if workers should try to sue.

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

In issuing the order, Trump was not actually “ordering” meatpacking facilities to remain open or reopen. Instead, the order authorizes the secretary of agriculture, Sonny Perdue, to use powers granted by the DPA 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 to liability protection, meanwhile, was apparently connected to an action taken on April 26 by the Centers for Disease Control and the 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.

The idea here is that if producers follow the CDC/OSHA standards, they presumably would decrease their liability risks.

The Emerging Debate in Washington

A bit less dramatically, the U.S. Chamber of Commerce and other business organizations have been lobbying for special legal protections for business 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.

So, the question is how to provide balance. How are we to provide business some protection from lawsuits that could damage or even ruin them, while also providing justice for workers who may not have the option of leaving?

Democratic and Republican lawmakers are working on the next COVID-19-related relief package, and those questions are part of what they’re reviewing. Democrats will be pushing to expand protection for workers. Republicans will be seeking to identify how businesses can be legally protected.

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. If businesses follow the guidelines, he has suggested, they should be immune.

Many businesses owners agree that a blanket exemption is not realistic and that specific rules should be laid down to provide guidance to both employers and workers.

Actions Businesses Can Take on Their Own

“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.

Specifically, Swig told the Inquirer, he’s planning to create one-way lanes in lobby corridors and Plexiglas dividers between workspaces in his properties, but added that he’s looking for more guidance.

The debate in Washington has just begun, but Harvard Law School professor Noah Feldman has suggested that both sides should immediately take a serious look at what a “safe harbor” for businesses might look like. 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.

“That way businesses won’t have to guess what reasonable precautions are,” he wrote. “They will know the rules. So long as they follow the rules, they will be safe from liability. If they break the rules, they will have to pay.”

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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.