Businesses call for a federal coronavirus liability shield, but they’ll have to wait

by Caroline Bottger

For those out of work, a new coronavirus bill could bring financial relief. For employers, it could bring federal protection from the latest specter of the post-coronavirus world: liability suits. And indeed, help might be on the way. Senate Majority Leader Mitch McConnell (R.-KY) announced a five-year “liability shield” for businesses, health care providers, universities and schools, protecting them from coronavirus-related lawsuits.

It’s unclear at the moment what such protections would look like. Linda Kelly, head counsel for the National Association for Manufacturers, said, “We’re looking for a heightened standard to  apply” before a lawsuit is filed, meaning that additional criteria must be met on top of any other legal requirements. What these criteria are remains uncertain. Furthermore, it’s not certain that a wave of lawsuits will even materialize. The majority of the 2,840 COVID-19 lawsuits filed since January 2020 have been between businesses and their insurance providers. Only about 50 were brought due to lack of protection while on the job.

Nonetheless, businesses large and small have taken a walloping during the COVID-19 crisis. According to McKinsey & Company, in a “muted recovery,” it could take five years for U.S. small businesses to return to pre-2019 levels of GDP. Businesses want reassurance that they will be protected when they reopen. However, Democrats worry that liability protections could prevent employees from reporting workplace negligence, such as non-adherence to CDC guidelines. Labor unions and advocates agree, saying that such protections could end up shielding businesses. However, the shield is projected to be in place for five years, not forever.

Until now, employees and customers have signed ‘coronavirus waivers’ acknowledging the risk of contracting COVID-19 while in an establishment, releasing said establishment from responsibility. Ahead of the new school year, schools and universities have had students and staff sign these legal documents too. But the quality and reliability of waivers has differed across businesses and states: some are relying on legal counsel, others are downloading free templates from the internet.

Such a piecemeal approach could prove problematic in the long run, so there is a strong desire for federal protection. Waivers are enforced on an individual basis, and only cover the person who signs them, not their family members or friends who might catch the virus from them. “To be the most enforceable, you have to have a contract that is narrowly tailored to your business,” said Tyler T. Rasmussen, a litigation partner at Fisher Phillips in California.

As the summer has gone on, cases have spiked in areas that did not have as many cases in the spring. Nearly half of states are delaying reopening plans due to a severe increase in cases.

And with Congress out on recess until July 20, businesses, schools and other establishments will simply have to wait and see what the next bill might bring.

Caroline Bottger is a freelance writer who writes on issues of technology, privacy, and security. 
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