Shield Employers from COVID-19 Liabilities Created by Government

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Now that government officials and business owners are busy planning for a “semi-normal” phase of post-quarantine reopening, policy makers and business organizations are considering what legal and regulatory obstacles they might be facing. Senate Majority Leader Mitch McConnell recently suggested that “health care providers and businesses” might be exposed to new litigation related to their decision to reopen, and told Fox News’ Neil Cavuto that any future bill to provide more federal aid to state and local governments would have to provide liability protections “for those who have been on the front lines—hospitals, doctors, nurses.”

So far, congressional Republicans haven’t put forward any legislative language detailing what those protections would look like, but the U.S. Chamber of Commerce’s recent “Implementing a National Return to Work Plan” letter to members outlines several legal and regulatory issues the organization believes need to be addressed by policy makers. The letter mentions discrimination concerns, independent contracting, and health privacy, among other topics. It also includes a section on what the Chamber considers “perhaps the largest area of concern for the overall business community,” exposure liability.

The Chamber’s recommendations for a liability shield are strongest in cases where employers seem to be sandwiched between two competing government threats—situations in which following existing workplace law could expose firms to sanction by the courts. On the question of anti-discrimination claims, for example, employers may need to “discriminate” against older workers when prioritizing which employees are allowed to return back to work first, given how much greater a danger COVID-19 is to older individuals. The same is true of health privacy expectations. How can an employer make an informed decision about who should be welcomed back to work if they are forbidden from asking about an employee’s infection status or presence of significant comorbidity conditions?

The section on independent contracting is especially interesting, because it relates to one of the biggest labor policy fights of the last decade. The Chamber points out that providing the same assistance to contract workers as they do to their own employees “could be used to argue that the individual has ceased to be an independent contractor and is instead an ‘employee.’” This is precisely what the debate over “joint employer” standards has been about. The short version is that labor unions and left-leaning policy advocates want as many workers as possible to be considered “employees” under federal labor law, while most employers want to retain the flexibility of short-term contract arrangements.

My former colleague Trey Kovacs wrote about this issue extensively, including the National Labor Relations Board’s 2018 rulemaking, and my colleague Ryan Young just wrote about California’s attack on independent contracting earlier this month for the Orange County Register. Not only is the preexisting effort to reclassify contract workers as employees an infringement on the rights of both employers and workers (many of whom prefer their non-employee status), but in the case of the coronavirus pandemic, it’s potentially scaring off employers from providing valuable benefits to their contractors. This is another case where the Chamber’s rationale is especially strong, given that it is government policy itself that is forcing a perverse outcome.

As the Chamber’s letter notes, the biggest potential body of claims seems to be that workers (and potentially customers) will sue business owners for having contracted COVID-19 while on premises. Sen. McConnell’s comments suggest that he thinks that even health clinics and hospitals could be sued for transmission liability. It’s certainly possible that a plaintiff’s attorney would file such a suit, but it’s difficult to imagine how such a claim could be proven, especially given the frequency with which patients—especially younger patients more likely to be in the workforce—have been apparently asymptomatic even when infected. Any given patient could have been infected in any number of places, regardless of the presence or absence of face masks at their workplace.

I mentioned above that requests for being shielded from liability are strongest when they are specific and targeted and address situations in which existing government policy is causing a no-win conflict for employers. They are weakest when contemplating a blanket immunity against any COVID 19-related legal action. Citizens having recourse to the courts for tort actions is a fundamental right, and thus Congress faces a very high bar in potentially limiting that right. There may very well be unique circumstances that prevail during the current emergency and which call for specific, one-time solutions. But this should not be the excuse to categorically limit legal action against business entities.

If the general system of tort liability in the United States is unbalanced, inadequate, or in need of reform, Congress needs to come to such reforms honestly and not under the cloak of emergency response. My colleague Ryan Young wrote persuasively on March 12, as the crisis was still emerging, of the limits of short-term “flash policy.” His recommendations are relevant here, too.