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States Revive Push for Virus Liability Protections for Employers

Jan. 20, 2021, 10:31 AM

More than a dozen states at the start of the 2021 legislative season are renewing a push to shield businesses from lawsuits over customers’ or employees’ Covid-19 exposure.

From Florida to Montana, state lawmakers have declared liability protections to be a top priority this year. Republican lawmakers are mostly leading the charge, but in a few cases they’re coordinating with Democratic legislators or governors. If these states enact liability shields, they would join more than a dozen others that did so in 2020.

These state laws broadly shield all or most types of businesses from coronavirus-related liability lawsuits, unless a plaintiff can show the company was grossly negligent or guilty of intentional misconduct.

After a federal proposal championed by Senate Republicans failed to win approval, the attention is back on the states and expected to stay there, now that Democrats will control both chambers of Congress and the White House as of Wednesday afternoon.

“We do not anticipate liability protection popping back up” at the federal level, said Ashley Cuttino, an attorney who co-chairs the Covid-19 litigation practice for Ogletree Deakins.

Wisconsin came close on Jan. 12 to enacting the first liability protection law of 2021, but fell short because of differences between the Assembly and Senate versions of a broad Covid-19 relief bill. Both include liability protections but differ in other provisions, such as the Assembly bill’s proposed ban on employers mandating Covid-19 vaccines for their workers. Democratic Gov. Tony Evers said he would sign the Senate version if the Assembly agrees to it.

Montana’s Senate passed a liability shield bill on Monday that now goes to the House for consideration. Republican Gov. Greg Gianforte has said he supports the measure.

State-level liability protections, unlike the federal proposal the Senate GOP promoted for much of last year, don’t shield employers from coronavirus-related claims under federal employment statutes, such as anti-discrimination or anti-retaliation laws, Cuttino said. They do provide an extra layer of protection against claims such as a workplace wrongful death lawsuit or a complaint of unsafe working conditions, she said. Those types of claims are often, but not always, preempted by workers’ compensation laws or federal Occupational Safety and Health Administration jurisdiction, she added.

No Flood, But Litigation ‘Fear’

Chambers of commerce, restaurant associations, and other business groups have been calling for liability protections since the pandemic gripped the U.S. last March. They contend that even the threat of a flood of lawsuits would make it difficult for businesses to reopen after virus-related shutdowns, and that litigation could lead some to close permanently.

The American Legislative Exchange Council, an idea-exchange for conservative state lawmakers, last year drafted model legislation for states to use to enact liability protections.

Cuttino and some state legislators advocating for the protections, including Florida Rep. Lawrence McClure (R), acknowledged there still hasn’t been a rush of liability litigation, in line with evidence from litigation trackers and court dockets. But they say the threat remains significant.

“It’s the fear of liability. Our businesses have been through just an unbelievable, uncertain time. Once in a hundred years, right?” McClure, who’s sponsoring Florida’s H.B. 7, told a House committee that voted to advance the bill on Jan. 13. “Although the courts aren’t packed, I’ll submit, it’s the fear of frivolous lawsuits as this evolves. We have the obligation to define that and put the business community at ease.”

Trial lawyers’ associations, labor unions, and worker advocacy groups oppose liability shields, arguing that limiting people’s ability to hold businesses accountable in court takes away an important incentive for companies to follow proper health and safety protocols to protect workers and customers—a point that Pennsylvania Gov. Tom Wolf (D) echoed when he vetoed a liability shield bill in November.

The language in the Florida measure is unconstitutional because it would remove the right to trial by jury, turn a judge into the jury, and set “an impossibly high standard, to be honest, to prove by clear and convincing evidence gross negligence on the part of the property owner in failing to follow the guidelines,” said Curry Pajcic, treasurer of the Florida Justice Association and a past president of the American Board of Trial Advocates. The Florida AFL-CIO also objected to the bill on similar grounds.

Eyes on Indiana, Texas

Bills proposing Covid-19 liability limits also have been filed for 2021 in Alabama, Alaska, Indiana, Missouri, and North Dakota. Governors or legislative leaders have voiced support for enacting liability protections this year in Arizona and South Carolina, and business groups also are urging lawmakers to pass them in New Hampshire and Texas.

The specific language varies somewhat from state to state—as with the laws that states passed in 2020—but many include protections for nonprofits, individuals, and government entities such as schools and prisons.

“Our businesses, our healthcare providers, and educational institutions should not be put at risk or competitive disadvantage through no fault of their own, particularly after following safety protocols,” South Carolina Gov. Henry McMaster (R) said in calling for liability limits during his Jan. 13 State of the State speech. “We should be careful not to let litigation kill what the pandemic could not.”

In 2020, Georgia, Idaho, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nevada, North Carolina, Ohio, Oklahoma, Tennessee, Utah, and Wyoming enacted broad liability restrictions that protect many or all businesses from Covid-19 lawsuits. A number of other states adopted narrower restrictions to protect specific industries, such as health-care providers or makers of personal protective equipment, while a few governors issued orders to establish liability protections.

A handful of those states could take further action this year. In Georgia, for example, a coronavirus liability shield law is due to expire in July, and House Speaker David Ralston (R) has voiced an interest in extending it. In Arkansas, Gov. Asa Hutchinson (R) has called on state lawmakers to extend and reaffirm his declaration of a state of emergency, which would allow his order imposing liability restrictions to remain in effect.

—With assistance from Jennifer Kay in Miami

To contact the reporter on this story: Chris Marr in Atlanta at cmarr@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com

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