How businesses can manage COVID-19 legal risks

by Rushing McCarl Aug. 10, 2020

The novel coronavirus (COVID-19) poses significant liability risk for businesses. In this update, Rushing McCarl will highlight a few of the issues that businesses should consider as they consider reopening to the public.

Liability Risks

Since the partial reopening of businesses in May, Americans have become accustomed to sights such as carefully placed hand sanitizer, workers wearing masks, and social distancing cues. As science progresses in its understanding of how coronavirus is transmitted, businesses will need to tailor their approach to mitigating risk.

All businesses must be aware of the risk of negligence liability. Business owners owe a duty to protect customers and workers from known dangers on their property.

Customers

A business risks being held liable for negligence if it (1) knows of, or by the exercise of reasonable care would discover, a dangerous condition present in the business premises, and should realize that it involves an unreasonable risk of harm to those patrons; (2) should expect that the patrons will not discover or realize the danger, or fail to protect themselves against it; and (3) fails to exercise reasonable care to protect its patrons against the danger.[1]

The nationwide response to coronavirus has ensured that its dangers are well-known and widely publicized. Courts will therefore hold that coronavirus is a known and obvious danger about which business owners will be deemed to have knowledge. The risks associated with coronavirus infection—including the risk of death and the potential for long-term health consequences—pose a clear risk of harm to patrons.

Despite the known risks of coronavirus, not everyone is taking precautions to avoid infection. Business owners will be unable to rely on their patrons to take reasonable precautions and should assume that patrons will fail to protect themselves unless encouraged to do so and educated about how to do so.

In addition to the duty to protect customers, businesses also have a duty to provide a safe workplace, and that duty extends to protecting workers from the risks of coronavirus.

Essential workers

On May 6th, California Governor Gavin Newsom signed an executive order that makes coronavirus-related worker’s compensation claims easier to prove. The order, Executive Order N-62-20, creates a presumption that any essential worker who contracts coronavirus did so at work. While the presumption can be overcome with compelling evidence, such evidence may be difficult to marshal.

Nonessential Workers

There is no similar presumption applicable to nonessential workers in California. However, a worker contracting coronavirus while at work will probably have a colorable claim for worker’s compensation.

Third Parties

There are foreseeable third parties who may have claims against businesses. A worker contracting coronavirus while at work may be limited to a worker’s compensation claim. However, if the worker’s child were to contract the virus, the child may have a colorable claim against the business. In all of these cases, however, a key question will be whether the plaintiff can trace the infection to the business.

Risk Mitigation

A business’s approach to mitigating coronavirus risk should rely on a combination of compliance with federal, state, and local laws; observation of best practices developed by similar businesses; and use of explicit warnings, disclaimers, and liability waivers.

At a minimum, businesses should have their counsel review all applicable laws and ordinances to ensure compliance. There is a quickly changing patchwork of federal, state, and local laws relating to coronavirus, and businesses should retain counsel to track these developments and update clients about new risks and compliance needs.

Policy guidelines will change as scientists’ understanding of coronavirus continues to develop. A simple but essential step for businesses is to study and implement the CDC’s guidelines. Additionally, businesses should observe the best practices of other businesses in their area. These practices may include the use of masks, face shields, posted warnings, physical barriers between customers and employees, six-foot social distancing requirements, capacity limitations, hand sanitizers and other disinfectants, and routine deep-cleaning.

Liability waivers can also be a helpful tool in mitigating risk to businesses. A carefully drafted waiver creates clear evidence that a worker or customer knowingly assumed the risk of infection. Of course, many interactions with customers are too fleeting to permit a waiver, but businesses should consider using them whenever customers will interact with the business for a prolonged period.

Rushing McCarl provides this information for educational purposes only. It should not be construed as legal advice, and readers should not act upon it without seeking advice from an attorney.

Resources:

Centers for Disease Control and Prevention, Reopening Guidance for Cleaning and Disinfecting Public Spaces, Workplaces, Businesses, Schools, and Homes, https://www.cdc.gov/coronavirus/2019-ncov/community/reopen-guidance.html.

Centers for Disease Control and Prevention, Interim Guidance for Businesses and Employers Responding to Coronavirus Disease 2019 (COVID-19), May 2020, https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html.

Centers for Disease Control and Prevention, COVID-19 Toolkit for Businesses & Workplaces, https://www.cdc.gov/coronavirus/2019- ncov/community/stay-safe.html.

Centers for Disease Control and Prevention, Guidance for Cleaning and Disinfecting, https://www.cdc.gov/coronavirus/2019-ncov/community/cleaning-disinfecting-decision-tool.html.

The White House, Guidelines: Opening Up America Again, https://www.whitehouse.gov/openingamerica/.

California & Los Angeles:

Gavin Newsom, Executive Order N-62-20, https://www.gov.ca.gov/wp-content/uploads/2020/05/5.6.20-EO-N-62-20-text.pdf.

Covid19.ca.gov, Resilience Roadmap, https://covid19.ca.gov/roadmap/.

Covid19.ca.gov , Industry guidance to reduce risk, https://covid19.ca.gov/industry-guidance/

County of Los Angeles, COVID-19: Information for Businesses, https://covid19.lacounty.gov/covid19-2-2/consumers-businesses/for-businesses/.

Industry Spotlight: Tech

Tony Romm, Drew Harwell, Elizabeth Dwoskin and Craig Timberg, Apple, Google Debut Major Effort to Help People Track If They’ve Come in Contact with Coronavirus, Wash. Post (Apr. 10, 2020), https://www.washingtonpost.com/technology/2020/04/10/apple-google-tracking-coronavirus/.

Industry Spotlight: Entertainment

Vice, Hollywood Finally Has a Plan for Reopening—But Should It?, https://www.vice.com/en_us/article/qj43bv/when-will-hollywood-reopen-during-coronavirus-pandemic-plan-for-making-film-tv-production-safe.

Other COVID-19 Resources:

U.S. Department of Labor, COVID-19 and the American Workplace, https://www.dol.gov/agencies/whd/pandemic.

U.S. U.S. Equal Employment Opportunity Commission, What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws, https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm.

[1] Restatement (Second) of Torts § 343.