What No Statutory COVID Immunity Means for Businesses

December 28, 2020 | Podcasts

In achieving a compromise in the latest COVID-19 relief package, one of the items cut from the final bill was Senator McConnell’s business immunity protections from coronavirus-related lawsuits. Jackson Walker attorneys Brad Nitschke and Amanda Crouch discuss what that means for business liability issues, and how federal, state, and local regulations play a role going forward.

Greg Lambert: Hi, everyone. I’m Greg Lambert, it’s December 28th, and this is Jackson Walker Fast Takes.

After holding the bill for a week, the President signed the next round of COVID relief bills into law. One item missing from that package late in the negotiations was statutory immunity for businesses and others facing lawsuits for COVID infections. I asked Jackson Walker attorneys Amanda Crouch and Brad Nitschke to come on the show to discuss some of the impacts on businesses.

Amanda, what exactly was Senator McConnell attempting to protect in his proposed business liability immunity package?

Amanda Crouch: Thanks, Greg. The proposed bill included liability protections for businesses. The goal was to safeguard businesses against most lawsuits or enforcement actions connected to the coronavirus from December 2019, which was before the first case was identified in the United States, through October 2024. It would also help move lawsuits from state courts to the more business-friendly federal system. Now, employers would still be liable for pandemic-related personal injuries if they failed to follow public health guidelines or engaged in gross negligence or intentional misconduct, but the standard would be a little bit different that the plaintiff had to prove.

Under the proposed legislation, the plaintiff would have had to prove by clear and convincing evidence, which is a higher standard than regular negligence cases, three things:

  1. They’d have to prove that the defendant was not making reasonable efforts, in light of all the circumstances, to comply with applicable government standards and guidelines that were in effect at the time of the exposure.
  2. The defendant engaged in gross negligence or willful misconduct that caused the actual exposure to COVID-19.
  3. The actual exposure to COVID-19 actually caused the plaintiff’s personal injuries.

As you can see, the standard is higher than what plaintiffs have to prove today with these types of injuries. It was meant to protect businesses in that regard.

The proposed legislation would also have limited the plaintiff’s recovery to economic damages, unless the defendant engaged in willful misconduct. It would also limit lawsuits related to COVID-19 testing and personal protective equipment if that equipment met the U.S. Food and Drug Administration standards. So, changing the standard a little bit and making it harder for plaintiffs to sue businesses in an effort to protect businesses from those types of actions.

Greg Lambert: Thanks, Amanda. Now, Brad, the liability shield didn’t make it to the approved bill. So, what does that mean for businesses and their potential COVID liability?

Brad Nitschke: Yeah, thanks, Greg. So, in some senses, we’re kind of back to where we started. When COVID started earlier in the year, one of the first issues talked about from a business-going-forward standpoint is, “How are we going to decide if and when a business is liable for a COVID infection?” And I feel like, for most of the year, we’ve been waiting on Congress and on state legislatures to decide that question. Now that this relief package has been passed without federal immunity in place, the first place we go is to the states that have passed, at the state level, immunity statutes. A number of states around the country have already done the math and figured out when and how businesses will be liable for COVID infection claims. Texas, however, is not one of those states because our legislature hasn’t been in session this year. And so in Texas, we’re still sort of left looking at COVID through the lens of either premises liability or negligence, or some other existing common law claim that’s out there.

There’s a couple of ways to look at how a business might be impacted by a COVID claim, at this point, at least unless and until Congress takes a second bite at this or the Texas Legislature passes a state immunity statute. So, the first has to do with employers. Of course in Texas, employers who are subscribers to our workers’ compensation system have some additional rights when workers allege they’ve been injured on the job, and certainly you would expect that that may apply to a worker who claims that he or she has been infected with COVID on the job. And so I think employers have a much more familiar system to gauge their exposure. But for everybody else, you know, we look at premises liability claims and general negligence claims, which are – typically in the past – how plaintiffs have tried to hold businesses accountable for encountering infectious diseases on the business’s premises. Now, premises liability, there are some key questions that have to be asked:

  • Who’s the claimant?
  • What’s their relationship to the business? Because that matters.
  • Whether or not the owner knew of some unreasonably dangerous condition on the premises, and whether the owner warned or made safe that condition. So, notice is a key issue here.

I think in the COVID realm, some of the questions courts are likely to be asked to consider are whether an owner knew of a particular risk of COVID infection on the premises. So, for instance, did the owner know that there was a COVID-infected employee who was having close contact with customers and not following state and local health guidance at the time? Is the owner aware of high-risk behavior of other people on the premises that didn’t comply with the state and local rules in effect?

The other way to look at notice in this context, though, is: Did the claimant know of a risk of COVID on-site? So, looking at the type of premises, the activities that take place there, whether obvious precautions like masks and distancing are being enforced – those types of things – was the claimant effectively on notice that there was a risk of being exposed to COVID on the premises? I think those are some questions that businesses may want to think through while we’re waiting for the legislature to address this.

Looking at it from the negligence angle: Here, the question that’s being asked is, really, did the business exercise reasonable care? What does that mean? Well, it’s a fact-specific question. And so while we don’t have a COVID immunity statute to tell us exactly what a business has to do to avoid liability, looking through this familiar lens of reasonable care, one of the things we can look at are the public health rules that are in place, as one metric that courts may apply to gauge whether a business exercised reasonable care.

So, for businesses who have been counting on Congress or the legislature to provide statutory immunity, and who now feel like they need to catch up a little bit, I think, some low-hanging fruit for those businesses is to first look at the state and local health rules that are in place in areas where you operate, and make sure that you’re complying with the ones that apply to you. For businesses in Texas, this could include things like the Governor’s current executive orders, the Reopening Texas guidelines from the Department of State Health Services, and the guidance from your local health authority that fills in some of the spaces between the state-level guidance. I think another opportunity for businesses who are trying to find some better security here is to look at the federal CISA 4.0 guidance for position-based risk assessments in the workplace. This looks at questions like:

  • Who can we eliminate from the potential exposure pool by allowing them to work from home?
  • How can we make in-person work that has to be done in-person safer?

There’s some helpful guidance from the federal government on how to run those traps.

This is, of course, a good conversation to have with your attorney to talk through the specific facts of your business and the laws that are in place where you operate. But I think those are some starting points for businesses who are a little surprised by the absence of relief on this front in the congressional package.

Greg Lambert: Well, Amanda Crouch and Brad Nitschke thanks again for taking the time to talk to me.

Amanda Crouch: Thanks, Greg.

Brad Nitschke: Thank you, Greg. Happy holidays.

Greg Lambert: Happy holidays to everyone.

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The music is by Eve Searls.

This podcast is made available by Jackson Walker for informational purposes only, does not constitute legal advice, and is not a substitute for legal advice from qualified counsel. Your use of this podcast does not create an attorney-client relationship between you and Jackson Walker. The facts and results of each case will vary, and no particular result can be guaranteed.

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Please note: This article and any resources presented on the JW Coronavirus Insights & Resources site are for informational purposes only, do not constitute legal or medical advice, and are not a substitute for legal advice from qualified counsel. The laws of other states and nations may be entirely different from what is described. Your use of these materials does not create an attorney-client relationship between you and Jackson Walker. The facts and results of each case will vary, and no particular result can be guaranteed.

In This Story

Amanda N. Crouch
Partner, San Antonio