Bloomberg Law Analysis

ANALYSIS: Reopening — Who Bears the Risk?

June 26, 2020, 10:24 AM

Reopening in the wake of the pandemic poses a Hobson’s choice for businesses: reopen, and face the risk of economic disaster from coronavirus exposure claims by employees and the general public; or remain closed, and endure continued and certain economic ruin.

The reopening issue has also become a political hot potato. Republicans are positioning for safe harbors and limited immunity for businesses that operate in compliance with CDC-backed best practices, while Democrats are worrying that any such protections will further expose employees and the public to actions of profit-minded businesses that skirt the rules.

Liability Waiver

The most obvious—and tempting—solution is a liability waiver, combined with risk assumption for attendees of large events, participants in group activities and sports competitions, and retail business customers and employees. Come patronize our event or our reopened stores! But if you choose to do so, you waive liability and assume all risks of infection!

Is this approach devious, diabolical, or simply the new reality? The answer may depend on whom you ask.

On one hand, businesses owe a duty of reasonable care to provide a safe work environment for employees and safe premises for business invitees. When is that duty satisfied? Does failure to meet that standard invalidate a waiver signed by a guest? And what is the standard? Cleaning, social distancing, hand washing, face covering, and temperature monitoring? Or is more required? Even with such protections, a guest may become sick and expose others to the disease. Should a business that has exercised reasonable precautions by implementing recommended procedures be liable in such an instance? And when these same questions are applied to the employer-employee relationship, how does that change the employer’s obligations and potential liabilities?

On the other hand, common sense tells us that convening gatherings of people indoors for long periods of time for one-time events or for everyday commercial activities while the threat of coronavirus persists is reckless—maybe even reckless per se. Requiring employees and business invitees to accept the risk of exposure to Covid-19 as the price for workplace or event entrance is at best unenforceable as a contract of adhesion, given the disparity in the parties’ bargaining power, and at worst a sleight of hand to confuse the unwary.

Does Enforceability Matter?

So what is likely to happen? Businesses will post warning signs and seek liability waivers. That is certain to happen. And why not? What does the business have to lose? As a practical matter, no one will turn away on account of these ubiquitous warnings. They will become invisible to once-homebound consumers and retail workers within days if not hours of reopening. Some people will become sick, and while the signs may deter a few from litigating, someone will surely test the enforceability of the waiver.

Typically, waivers must be voluntary and knowingly made to be enforceable—hardly the case for employees and customers who, as a practical matter, have no other choice. In addition, a waiver must be clear and unambiguous, and not contrary to public policy (a waiver of gross negligence or reckless conduct will likely contravene public policy). But even if a court declares the waiver to be unenforceable, a plaintiff still faces the high hurdles of proving negligence and causation—that the business failed to exercise reasonable care and that, in fact, the plaintiff contracted the disease as a result.

Without further legislative guidance, the courts will need to figure out where the risks of reopening ultimately lie. In all likelihood, in egregious cases, some plaintiffs will win and some businesses will lose. Liability waivers and acceptance-of-risk warnings will simply add a layer of complexity that will likely turn out to be ephemeral, not outcome-determining.

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