Businesses Will Need Protection from Worker and Customer Liability Lawsuits

By Michael Burns, courtesy of SBAM Approved Partner ASE

Last week we reported on safety compliance requirements in Michigan under the Governor’s EO 2020-59. What will non-compliance or compliance that does not prevent an illness mean to an employer?

As businesses plan to re-open to serve, produce, and employ they do so with a very large legal threat. What if a customer or an employee claims they contracted Coronavirus from its place of business?

Currently, even if the business follows every safety and health guideline out there, they are still potentially exposed to lawsuits alleging the virus was caught from their operation.  Customers will bring lawsuits and employees can bring workers compensation claims (some liability protection).  If it is alleged the organization did not comply with safety and health guidelines sufficiently (and did so willingly) they could face a civil lawsuit as well. It will be up to the employer to counter and prove that the employee failed to follow proper safety protocols.  Let the lawsuits roll…

Currently business lobbyists and executives are working on moving the Trump Administration and Congress to address the potential lawsuit liability that will (not may) arise from alleged safety and health breaches causing illness and unfortunately potentially death.

The New York Times (NYT) reports that business advocates are requesting at least temporary limits on legal liability in such areas as worker privacy, employment discrimination, and product manufacturing. The virus will continue to circulate for months or longer, and businesses already weakened by the economic forces face lawsuits from plaintiffs looking to capitalize on the general state of business disarray and inexperience trying to re-start or keep going during the pandemic.

Senate Majority Leader Mitch McConnell (KY) stated that he sees this concern as “urgent” and will be taken up when the Senate reconvenes May 4^th. Democratic leadership and Big Labor are lining up against any protections for businesses during the pandemic. As the NYT reports this will be a huge horse trade involving the Democrats’ support for federal bailouts for state and local government and the Republicans’ call for liability protection for business.

One example of where employers are stuck making their own rules is in the area of face masking. In the state of Michigan, the Governor has ordered employers to provide face masking to employees and exercise social distancing and other protective measures in the workplace. Employers are the ones that must implement rules requiring employees to wear facemasks and conduct themselves as detailed by social distancing and other safety guidelines.

Currently, the Occupational Safety and Health Administration (OSHA) is not requiring the wearing of face masks. OSHA is putting the employer in the position of enforcer without a direct regulation to point at. If an employee fails to wear a face mask, refuses to wear it, or does not wear it properly, the employer is responsible and must discipline or discharge the offending employee.  Easy perhaps, but what about a worker that has trouble breathing with the mask or has a protected characteristic (ADA) objection to wearing the mask.  Note that the Executive Order does state that a mask must be worn “as able to medically tolerate.”

Then there is the issue of Workers’ Compensation.  It is somewhat unsettled as to whether exposure to a pathogen is outside of that law and therefore may be a personal-injury claim instead.

One important step that is achievable is for the federal agencies (Department of Labor and Equal Employment Opportunity Commission) to issue more and better guidance for employers to rely on addressing worker safety and health. And at least during the pandemic, the law would protect businesses if they required the workers and customers to wear masks and practice social distancing. If someone gets ill or worse, the employer that had the policies and practiced the protections as required should be exempt from legal liability.

In addition to the above, employers need to keep an eye out for other legal threats:

FLSA – Fair Labor Standards Act (FLSA) compliance could be breached if non-exempt employees that work remotely put in more than 40 hours a week.

FFCRA – Be ready for claims if improper payment of benefits under the Families First Coronavirus Response Act (FFCRA) occur. This new law came out fast and caught a lot of employers by surprise with not one but two sets of paid benefit requirements.

WARN – The federal Worker Adjustment and Retraining Notification Act (WARN) applies to employers with over 100 employees and requires proper employer notice when laying off or closing operations. Because the pandemic and stay-at-home orders came quickly though, most employers that had to do a hasty large-scale layoff may argue this was an “unforeseeable business circumstance” as allowed by the law. However, as time goes by, this defense may not be as effective.