As businesses adapt in the wake of the pandemic, they may face legal action by customers or employees related to COVID-19.  However, “essential” businesses as well as health care services can limit their liability exposure under the COVID-19 Recovery Act.  Here is what you need to know and where the law currently stands.  

Who is Protected?

Currently, restaurants complying with the operating requirements under Executive Order No. 141(6)(C)(2) can benefit from the Act’s limited immunity, but it is unclear whether the same applies to retailers or any other businesses. Here are the specifics:

Restaurants

Under Order No. 141 § 6(C)(4) (“Phase 2”), restaurants that comply with its operating requirements may benefit from the Act’s limited immunity.

This is what restaurants need to do:

Under Order No. 141 § 6(C)(4) (“Phase 2”), restaurants that comply with its operating requirements may benefit from the Act’s limited immunity.

This is what restaurants need to do:

1. Limit customer indoor and outdoor seating to Emergency Maximum Occupancy, which is the lowest number out of the following three tests:
   • 50% of the stated fire capacity.  If there is no stated fire capacity, then no more than 12 customers per 1000 sq. ft.
   • The number of people in the space so that groups can stay 6 feet apart.
   • The number of people in the space so that no table of customers is within 6 feet of any other table of customers.  Moreover, each group of customers sitting at a counter should be separated from other groups by 6 feet.
2. Limit total seating at a single table to 10 people, unless they are members of the same household.
3. Strongly encourage employees to wear a face mask when within 6 feet of another person.
4. Follow Core Signage, Screening, and Sanitation Requirements, including promoting hand-washing and hand-sanitizer use for wait and food service staff throughout their shift and upon reporting to work, increasing disinfection during peak times, and disinfecting all shared objects between uses.
5. Mark 6-foot spacing lines in high-traffic and high-density areas for customers.

Retailers and Other Businesses

This is where it gets a little tricky.  Section 4.14(a) of the COVID-19 Recovery Act, under § 66-462(5), states that an “essential business” is a business “identified in [Executive Order No. 121]” subject to subsequent amendments and extensions as well as “any business that the North Carolina Department of Revenue determines is essential.”  Since the Department of Revenue no longer has the authority to make such determinations, Order No. 121 and the Orders that followed are the only basis for finding whether any business qualifies as an “essential business” for the purposes of immunity under the Recovery Act.

The Recovery Act expressly prescribes limited immunity for retailers and other businesses listed in Order No. 121.  Yet, as amended by Executive Order No. 135, Order No. 121 expired on May 8.  Subsequently, the Governor issued Executive Order No. 138 (“Phase 1”) and Phase 2, both of which no longer distinguished between “essential” and “non-essential” businesses.  This means that there is no longer a distinction between “essential” and “non-essential” businesses.  In fact, Phase 2 singled out restaurants as the only “essential business” for the purposes of the Act’s limited immunity.  Ultimately, it is unclear whether any businesses other than restaurants benefit from the Act’s limited immunity during Phase 2.

Nonetheless, retailers and other businesses should continue to operate according to best practices with or without the Recovery Act’s limited immunity.

What Type of Protection?

The Recovery Act’s limited immunity protects eligible businesses from civil liability related to COVID-19 related claims. The immunity only applies to claims:

• Made by a customer or employee;
• For injuries or death;
• Allegedly caused as a result of the person contracting COVID-19 (a) while doing business with the essential business or (b) while employed by the essential business; and
• Arising from acts or omissions taking place between March 27, 2020, the date Executive Order 121 was issued, and the date upon which Executive Order 116 will expire or be rescinded.

The limited immunity applies to any claims filed on or after March 27, 2020.

Conclusion

A full copy of the COVID-19 Recovery Act can be found here. (Go to page 42 for the Limited Immunity provisions.) 

This publication was prepared with the assistance of one of our Summer Clerks Le Ho.