Our Litigation, Legislation, and Public Order groups provide an overview of the current landscape of federal and state efforts to protect businesses (beyond those at the epicenter of the pandemic response) should they be targeted during the COVID-19 pandemic Should find guilt.
- The protection of the federal corporate liability was not passed
- An overview of the 22 states that responded to protective measures
- What businesses everywhere should be doing to maximize protection
The 2020 coronavirus pandemic has sparked many fears: fears about the health and well-being of oneself and loved ones, fears of economic impact and livelihood, fears of short-term and long-term disruption of lifestyle norms. Companies have been particularly concerned about the risk of legal liability if they become a target of COVID-19 contagion. At the federal and state levels, governments have made efforts to protect companies concerned about liability related to COVID-19 crimes.
While federal and state safeguards have been enacted for companies operating in the epicenter of the pandemic response – for example, health care providers, PPE manufacturers, and biopharmaceutical companies working towards a vaccine or other therapy – measures have emerged to protect small, medium-sized, and others Company seized. and large corporations against claims from customers, suppliers, contractors, or other non-employees they have engaged in the course of doing business with COVID-19 – whether that business is a manufacturing facility, store, office, or warehouse? (Worker claims are generally subject to government employee compensation laws and do not come under the umbrella of general tort claims.)
The federal liability protection for companies was not passed
Nationwide protection from COVID-19-related liability claims for the general corporate sector has been the subject of efforts by Congress but has not become law. Congress previously made provisions that only affect the medical industry.
On September 10, 2020, the US Senate largely failed to push ahead with a legislative package that contained the SAFE TO WORK Act (p.4317). The measure received 52 votes, missing the 60 votes required for progress. Earlier this summer, Senate Republicans tabled the SAFE TO WORK Act, which sponsors believed would help reopen the economy by introducing liability limits for COVID-19-related exposure violations. In particular, this legislation would limit claims for bodily harm against companies and limit claims for medical misconduct related to COVID-19. The bill should apply to small and large companies. Schools, colleges and universities; religious, philanthropic and other non-profit organizations; and local government agencies that have made reasonable efforts to comply with applicable public health guidelines and have not acted willfully or with gross negligence. Its features include:
- Creation of a federal plea for personal injury and laws on medical misconduct.
- Establishment of exclusive jurisdiction before federal courts and avoidance of contradicting state laws to promote uniformity between jurisdictions.
- Broad time coverage by applying to coronavirus-related exposures occurring between December 1, 2019 and October 1, 2024.
- Requiring procedural steps for prospective claimants, including requesting lawsuit notices and fee agreements for class actions.
- Limitation of punitive damage to determinations of will.
Conventional wisdom is that it is increasingly unlikely that Congress can agree on a legislative package before it is adjourned for October and most of November. After the election, Congress will return in late November to begin a session with lame ducks, which will provide Congress with the next opportunity to agree on federal coronavirus liability laws.
About half of the US states have new or pending protections
Our ongoing statewide review shows that nearly half of the US states – 22 more specifically – have taken or are trying to take specific measures to protect businesses from COVID-19-related crime claims. Here is a summary of the current status of this effort:
* Requires positive notification or publication by the company
While protective measures vary from state to state, we observed the following characteristics:
- Many of the safeguards extend immunity to COVID-19 transmission claims as long as the company is “materially compliant” or working in good faith to comply with federal, state, and local guidelines to prevent coronavirus transmission.
- As is to be expected, all states that have passed the Immunity Act have explicitly or implicitly created an exception for cases of willful intent, recklessness, gross negligence and other forms of increased fault beyond mere negligence.
- While most states have tried to legislate protection, one state (Alabama) has instead taken executive action through a gubernatorial proclamation.
- The proposed legislation has failed in three states (Arizona, Minnesota and New Mexico).
It is important that two countries have adopted protective measures that require positive notification of the companies: Georgia and North Carolina.
- Georgia’s unique law, the Georgia COVID-19 Pandemic Business Safety Act, creates a rebuttable presumption of risk-taking by anyone entering the business premises, but only if the company provides visitors with a specific warning via receipt or ticket or signage. Because of this, uniform warning signs have become ubiquitous at entrances to commercial facilities in Georgia.
- North Carolina’s obligation to terminate is less defined. Non-material companies will not be liable for claims related to the contraction of COVID-19 as long as the company has provided “reasonable guidance on measures to reduce the risk of transmission of COVID-19” on the premises. The Commentary on the Act gives no indication of the nature and content of such “reasonable notice” and the courts have not yet had an opportunity to interpret and apply the clause.
For companies with offices in Georgia and North Carolina, we recommend signage and other types of notification to reinforce the legal protections available. Appropriate signage would also be advisable in other countries. The common law risk-taking defense is reinforced by demonstrating that a visitor has been made aware of known risks.
It is unlikely that state-wide corporate protection will be passed through federal law this year. Therefore, legal protection will vary from state to state, with some states having no legal protection at all. Wherever claims for tort are asserted, regardless of whether COVID-19-specific measures are taken or not, defense against the assumption of risk, lack of cause of damage and lack of fault will come into play under general law. Therefore, companies should aim for the following general practices:
- Follow state (CDC), state, and local guidelines as much as possible and keep a record of your plan and execution.
- Communicate the expectations of your premises to your employees, customers and suppliers.
- Consider adopting risk reporting even if not required by law.
- Avoid behaviors that could be interpreted as reckless or grossly negligent.
We continue to monitor developments across the country and are happy to provide advice and legal assistance to minimize the business risks posed by the pandemic.
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