Are Statutory Safe Harbors on the Horizon for Businesses and Schools Returning From COVID-19?

Alerts / May 15, 2020

Senate Republicans and House Democrats are headed for a clash over whether to shield businesses, colleges and universities from liability as the economy begins to reopen amid the COVID-19 pandemic.

Senate Majority Leader Mitch McConnell, R-Ky., is spearheading efforts to “raise the liability threshold” for civil lawsuits. In addition to protecting employers from lawsuits brought by employees and customers, McConnell said he also wants to extend protections to colleges and universities that return to on-campus instruction in the fall.

“Our legislation is going to create a legal safe harbor for businesses, nonprofits, governments and schools that are following public health guidelines to the best of their ability,” McConnell said during a speech on the Senate floor.

“Can you image the nightmare that could unfold this fall when colleges and universities are still not open?” McConnell later told reporters. “That is a scenario that would only be further aggravated in the absence of some kind of liability protection that reassures school administrators that they can actually open up again.”

McConnell says it’s vital to protect employers from customers or employees who contract the coronavirus and accuse businesses of being the source of the infection – or from college students who say they got sick on campus. Without that protection, the senator said that businesses will lack the confidence to reopen, further burdening the economy already staggering under a virtual shutdown.

“The trial lawyers are sharpening their pencils to come after healthcare providers and businesses, arguing that somehow the decision they made with regard to reopening adversely affected the health of someone else,” McConnell said in April.

Congressional Democrats say Republicans’ fears of excessive litigation are unwarranted, and warn that raising the bar on liability would weaken worker protections.

Senate Democratic Leader Chuck Schumer, D-N.Y., accused McConnell of exploiting the pandemic to advance tort reform, a long-held policy goal of Republicans.

“McConnell wants to make it harder for workers to show up at their jobs and to hold their employers accountable for providing safe working conditions,” Schumer said. “Instead of fighting for more testing to help everyone working on the front lines, Sen. McConnell is fighting to protect corporate executives.”

Republicans say they’re not looking to provide businesses with blanket immunity. McConnell said employers should remain liable in cases of gross negligence and intentional misconduct.

“We aren’t going to provide immunity, but we are going to provide some certainty,” McConnell said. “If we want American workers to clock back in, we need employers who know if they follow the guidelines, they will not be left to drown in opportunistic litigation.”

The scope of any legislation remains to be seen. The U.S. Chamber of Commerce has circulated a plan for protection from a wide range of legal issues including health privacy, discrimination, workplace safety, employment, product liability, medical liability, securities liability, customer communications and claims under the False Claims Act.

Given the federal government’s involvement with businesses during the crisis, including under the Defense Production Act, some have wondered whether antitrust protection might be included in legislation. Congress and antitrust agencies are generally reluctant to confer antitrust immunities and protections typically apply only to narrow sets of circumstances. The existing antitrust immunities in the Defense Production Act and the Pandemics and All-Hazards Preparedness Act require significant government approvals and involvement and are likely to be construed narrowly. It would therefore be a significant departure for Congress to provide broad antitrust immunity as is being discussed for other areas of law.

Possible legislative options will remain an area of interest as American businesses and schools begin to reopen while the COVID-19 crisis continues.

Authorship Credit: Christian B. Jones, Brady P. P. Cummins and Ann M. O’Brien

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