General Liability Considerations and Potential Exposure in Reopening from COVID-19 Shutdown

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After weeks of business closures and stay-at-home orders, many states are slowly beginning to allow businesses to reopen their doors—usually with significant modifications from “business as usual,” but with more freedom to operate than during the shutdown. With this next phase of the COVID-19 pandemic come important legal and business issues to consider about reopening.

On May 1, Womble Bond Dickinson litigation attorneys Mark Henriques (who is leading the firm’s COVID-19 Task Force), Greg Horton and Sara Tucker presented a webinar on general liability issues in a return to work scenario.

“A lot of people are thinking about next steps. How do we reopen?” Henriques said.

While the federal government has issued guidelines on how companies should reopen, those ultimate decisions are being left to state and even local officials. (Womble Bond Dickinson has prepared a 50-state interactive map on business closures and reopening orders at stateclosures.com.) These reopening regulations vary greatly from state to state, even within the same geographic region.

For example, North Carolina is taking a conservative approach to reopening. Some retail operations may reopen on May 8, but gatherings still will be limited to 10 or fewer people. Restaurants and bars aren’t expected to reopen until late May. Neighboring South Carolina already has allowed many retail establishments to open. The state’s Department of Commerce is working rapidly to counsel businesses on whether or not they are eligible to reopen. And Georgia has the most aggressive stance on reopening in the country, allowing gyms, hair salons, restaurants and other in-person businesses to reopen in late April.

Making the Decision to Reopen

Many businesses have suffered severe economic losses during the shutdown and more than 30 million Americans have filed for unemployment benefits in the past six weeks. So the incentive to reopen and get employees back to work is strong. Company leaders want to reopen—not just for their own bottom lines, but for their employees’ as well. 

But there are risks as well. Obviously, the biggest risk—and a business owner’s greatest fear—is that an employee, customer or client gets sick at work or on the premises. This could lead to a range of claims against a business, ranging from employment claims and worker’s compensation filings to personal injury or even wrongful death lawsuits. 

“The biggest question I’ve heard from my clients is, ‘If we reopen and one of my employees gets sick, are we in jeopardy?” Horton said.

Again, that question can depend greatly from state-to-state, and also upon the circumstances of the workplace. Horton noted that South Carolina has a strong worker’s compensation preemption provision, which diverts most on-the-job injury claims from the courts to the state’s worker’s comp system. But many states do not have a similar provision.

“An employee easily could allege some type of negligence, such as failure to provide a clean work environment, failure to provide PPE, etc. How it’s going to shake out in the courts remains to be determined,” Tucker said.

Henriques said the risks are magnified for restaurants, retailers and other businesses that have a customer-facing presence, as they could face litigation from customers as well as employees.

“Some litigation already has been filed—it is not a theoretical risk,” he said. Tucker said the “liability risk (from COVID-19) isn’t astronomical, but it’s still there.”

Some federal lawmakers want to introduce liability protections for businesses that reopen, but to date, such measures have not been enacted on a national scale.

Beyond the legal liability concerns, business leaders also have to be careful about the risks to their brand and reputation. Such tolerance for risk may vary greatly from community to community, and that should factor into the calculus on when and how to reopen.

“You want to make sure you are taking the temperature of your community,” Tucker said.

Best Practices for Limiting Liability When You Reopen

Once the decision to reopen is made, how can businesses best protect themselves, their employees and their customers?

The first step – and one that should be taken before reopening—is to familiarize yourself with applicable guidelines from the CDC, OSHA, World Health Organization (WHO) and state and local authorities. If a business operates in multiple jurisdictions, make sure to examine all of the applicable laws and guidelines. Companies should consider appointing a COVID-19 point person or task force to stay abreast of the rapidly changing developments and advise company leaders as needed.

And the time to plan is now, even in areas where reopening still may be several weeks away. Considerations include:

  • Creating or revisiting workplace health safety protocols;
  • Establishing social distancing procedures for workers and customers. These can include limiting the number of people in a store (many states have mandatory guidelines for this), implementing one-way aisles, and spacing out employees at least six feet apart;
  • Reviewing shipping and receiving operations to make them as contact-free and safe as possible;
  • Closing breakrooms and other common areas;
  • Requiring PPE appropriate to the workplace;
  • Offering more shifts with fewer workers or other staffing changes to limit interpersonal contact; 
  • Regularly sanitizing the workplace, including frequent cleaning of commonly touched areas; 
  • Discussing responsibilities for common areas with the landlord—this should be clear and in writing; and 
  • Making hand sanitizer readily available to employees and customers.

Such protocols will vary from industry to industry, so Horton said businesses should pay close attention to what other companies are doing. “What I want my clients to do is meet the industry standards of care,” he said. “Do not fall behind—constantly stay updated and informed.” Even if these standards do not prove completely effective, the panelists said, it is much less risky to have a flawed plan than no plan at all.

There will be changes, so it is vital to communicate these changes with employees. When in doubt, over-communicate—and make sure someone is available to answer their questions.

Reopening is an exciting and stressful time for companies. While no amount of planning can completely eliminate the risk of legal liability, companies that carefully plan their reopening, with a focus on safety, have the best chance of a successful reopening.

“The bigger the company, the bigger the risk,” Tucker said. “Try and limit issues on the front end to prevent them from becoming bigger problems on the back end.”

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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