In 2020, employers have been struggling to navigate a maze of ever-changing COVID laws, regulations, and guidance from both the state and federal levels. It has not been easy. Besides trying to keep their business open, make ends meet, and generally stay safe, employers now have another thing to worry about: liability lawsuits for potential COVID-19 exposure, illness, or injury.
To protect businesses, the Legislature has passed new laws intended to create some certainty and protection against costly litigation. These are referred to as HB 6030 or the “COVID-19 Response and reopening Liability Assurance Act.” While the legislation is by no means a “get out of court free” card, it seeks to reduce lawyer costs and keep insurance premiums down across the board. Governor Whitmer signed the bills into law on October 28, 2020, which are effective immediately.
Q: Why do Michigan businesses need a “liability shield” against COVID-19 lawsuits?
A: The new law offers protections from tort liability related to COVID-19. The idea is to prevent negligence lawsuits against employers who were substantially following the law and public health guidance. As a policy matter, it is important to give employers and insurance companies some predictability – otherwise, insurance premiums will quickly become unaffordable and businesses may have to face litigation-related shutdowns, bankruptcies, etc., which would further disrupt the economy.
Q: What does the COVID-19 Response and reopening Liability Assurance Act do for businesses?
A: The new law grants businesses retroactive immunity (to March 1, 2020) from lawsuits alleging a COVID-19 claim, which is a tort claim based on or related to COVID-19 exposure (or potential exposure). COVID-19 claims also include allegations related to a business’s efforts to reduce COVID-19 transmission such as a “health screening, testing, contact tracing.” However, the immunity is only available if the business operated in compliance with all federal, state, and local laws and rules that were in effect and deemed legal at the time of the alleged incident.
An example of a potential tort claim is if a customer caught COVID-19 at your business and was injured. The customer will likely pursue a standard negligence claim, arguing that the business had a duty to keep the customer safe, breached that duty by allowing COVID-19 exposure, the exposure was the proximate cause of injury, and the customer suffered damages. Normally, the business would respond by disproving any of these elements – however, the new law creates an affirmative defense that allows the business to avoid liability by showing compliance with all applicable COVID-19 laws and regulations at the time of alleged exposure.
Q: What kinds of evidence would I need to show compliance and to claim immunity under the COVID-19 Response and reopening Liability Assurance Act?
A: The answer depends on your particular facts, location, and situation. However, in general a COVID preparedness and response plan, a designated COVID-19 coordinator, workplace policies directly addressing things like social distancing, mask-wearing, and disinfection protocols are all useful in showing compliance. For the latest guidance on compliance, check out my updated Guide for Michigan Employers Navigating COVID Regulations.
Q: Does this mean I don’t have to follow the COVID orders about masks and social distancing anymore at my business?
A: No. The orders enacted by the Michigan Department of Health and the Occupational Safety and Health Administration still apply and must be followed. Ignoring the government’s orders not only risks the health and safety of your employees and customers, but it also exposes you to government citations and fines for creating a dangerous work environment. The new law only gives immunity from a private lawsuit to a business that “acts in compliance with all federal, state, and local statutes, rules, regulations, executive orders, and agency orders related to COVID-19 that had not been denied legal effect at the conduct or risk.” In other words, a business that deliberately or recklessly violates safety orders receives no protection and will be fully liable for any injury or death related to COVID. Further, the law does not grant immunity from any administrative proceedings or civil actions brought by government entities to enforce COVID-19 safety orders.
Q: Are there minimum injuries that someone has to suffer due to COVID in order to bring a lawsuit?
A: No. Early drafts of the legislation included a “minimum medical condition” threshold that required a certain level of injury to bring a lawsuit – for example, hospitalization for at least 24 hours. Once the plaintiff met the minimum threshold, the employer could then introduce evidence of compliance with the law to create a “presumption” of non-liability. The final version of the law does not have this “burden-shifting” framework – instead, the requirement is that the employer show compliance with government directives in effect at the time of the alleged injury. Note that the law requires substantial compliance and expressly notes that a minimal inconsequential deviation is not enough to defeat immunity.
Q: Does this new law affect the existing workers’ compensation obligations or change potential exposure under workers’ compensation law?
A: No. The new law expressly states that it does not affect the rights, remedies, or protections under the Worker’s Disability Compensation Act. That means that if you have an employee who suffered a COVID-19 related injury in the scope of their employment, workers’ compensation insurance will likely apply and the COVID-19 injury will be treated the same as if the employee fell off a ladder, was hit by a forklift, or suffered some other more traditional work related injury. Note that workers’ compensation insurance is mandatory for businesses with at least one full time employee or at least three part-time employees at the same time.
Disclaimer: This guide is not intended to be and does not constitute legal advice. It is a summary of legislation for informative and promotional purposes only. Do not take any action or refrain from taking any action based on this guide, and always consult with a qualified professional about the circumstances of your particular case. Each set of facts is unique and different circumstances apply to each individual business.
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