Businesses Not Reopening Because They’re Afraid of Being Sued?

By Rachel Alexander Published on April 29, 2020

Yes, COVID-19 kills people. But so does a collapsed economy. Finally, states are beginning to let more businesses open. But there’s a problem. A big one, that could keep crucial businesses closed.

Georgia allowed some businesses to open on Friday. Several other states will do that on May 1. But some businesses might not open even when they can. Why? Because an employee or customer might get COVID-19 and sue them.

As long as someone might get sick, businesses might get sued. As long they’re sued, they could lose. They could face and lose dozens or hundreds of law suits. They could lose tens of millions of dollars. That would put the small and medium-sized business under. Why risk it? Why not wait?

A Warning

Lawsuits have already been filed against businesses over COVID-19. Cruise lines were the first businesses to get hit with suits. They’ve already lost almost a billion dollars worth of business. They won’t be sailing for at least another three months. With all the suits they might lose a lot more. (Suits against them have been hard to win in the past, but who knows how the pandemic will change the courts?)

Other businesses look at them as a warning. Small businesses that can’t afford lawyers are going to be very worried.

Small businesses that are less likely to be able to afford lawyers are going to be very worried.

Some industries require close human contact. They include hotels, hair salons, daycares, gyms and restaurants. How are they going to achieve social distancing? They can’t guarantee employees or customers will always be safe. A wrongful death lawsuit was filed against Walmart over the death of an employee.

Some of the businesses that were allowed to open in Georgia aren’t doing so. Others are opening with numerous restrictions.

Businesses Shouldn’t be Liable

What’s the answer, then? Protect businesses from being sued. More people are proposing this. President Trump said on Tuesday that he wants to shield businesses from liability. For example, he is going to order meat processing facilities to stay open, and will sign an executive order shielding them from lawsuits.

The U.S. Chamber of Commerce and several business groups are asking Congress to set a federal standard that limits liability for employers who follow CDC guidelines. White House economic advisor Larry Kudlow says reopened businesses shouldn’t be liable for coronavirus infections. Lawsuits may put them out of business. A writer at National Review urges state legislatures and Congress to pass laws shielding them. Both see that America needs businesses opening as fast as they can.

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Some states are already working on this. The House and Senate in Utah passed a bill last Thursday to protect businesses. It would make business owners “immune from civil liability for damages or an injury” when someone has been exposed to COVID-19 while on the premises doing something associated with the business.

A law enacted in March in New York protects health care facilities and volunteer organizations from both civil and criminal liability due to COVID-19. While it shields businesses from negligence, they will still be liable for willful misconduct, recklessly or intentionally inflicting harm.

Protecting Themselves

Businesses can already protect themselves in some ways. But they also remain vulnerable. Employees who contract COVID-19 at work can file a worker’s compensation claim, which removes their right to sue. And they will have to prove they contracted the illness at work, which will not be easy. However, a handful of states have shifted the burden to the employer when it comes to essential employees. The states’ laws presume that the employee caught COVID-19 at work. However, a judge in Illinois issued a temporary restraining order against the rule after business groups filed lawsuits opposing it.

Businesses can protect themselves to some extent by following the CDC guidelines.

Businesses can also protect themselves to some extent by following the CDC guidelines. Only healthcare facilities are required to follow the guidelines, but businesses would be wise to. A court will take that into consideration when deciding a lawsuit. That means using social distancing, providing hand sanitizer, separating sick employees and possibly providing face masks.

The U.S. Equal Employment Opportunity Commission (EEOC) is allowing employers — for the time being — to take the temperatures of on-site employees, even though this constitutes a medical exam. Businesses should also follow workplace guidelines from the Occupational Safety and Health Administration. One lawyer recommends that businesses have employees sign a waiver making them aware of potential COVID-19 exposure.

Of course, there is always a risk. Businesses with immunity might shirk their responsibility to take precautions against the virus. But so far it appears from media reports that the businesses reopening are taking great precautions. They should not be punished. The country needs them open. A sensible law should protect them.


Rachel Alexander is a senior editor of The Stream. Follow her on Twitter at Rach_IC. Follow The Stream at streamdotorg. Send tips to [email protected].


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