Limiting Liability Exposure from COVID-19: Best Practices for an Essential Business to Protect Its Customers, Employees and Independent Contractors

May 4, 2020Article

As COVID-19 lockdowns and stay-at-home orders remain in effect throughout the United States, there is a seemingly endless stream of bad news regarding the uptick in confirmed COVID-19 cases and deaths. Nevertheless, each state allows certain essential businesses to stay open to serve the public; in the coming weeks and months, non-essential business will also begin re-opening. Whether a grocery store, home improvement store, laundry service or the like, these businesses continue to face mounting challenges to protect their customers and employees from the “invisible” COVID-19 hazard that may exist in their stores. As additional people are infected and die from COVID-19, there will likely be a stream of litigation against essential businesses from both customers and employees. While COVID-19 is a novel issue, the likes of which have not been seen since the 1918 Spanish Flu, prior litigation can provide insight into steps a business can take to limit liability and mount a defense when a lawsuit arises.

What potential causes of action does a customer have against a business and what steps can the business take to help limit its liability?

In the context of a customer-business relationship (legally speaking a landowner – invitee relationship), the duty of care is established under a premises liability theory. Generally, a landowner can only be held liable for harm to an invitee (customer) on the owner’s land under three conditions:

(1) the owner knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk of harm to such invitees; (2) the owner should expect that the invitee will not discover or realize the danger, or will fail to protect themselves against it; and (3) the owner fails to exercise reasonable care to protect the invitee against the danger.

Thus, three conditions must exist for liability before liability can be established:

  • First, there must be a condition for which the business owner has actual or constructive knowledge; and
  • Second, the customer must not be able to reasonably discover this danger themselves; and
  • Third, the business owner fails to take reasonable steps to protect the customer from this danger.

COVID-19 is a novel hazard. Because there is not yet specific case law under which liability can be evaluated, it has to be analogized from other bodies of case law. Most case law in this context involves a slipping hazard or some other physical defect in the premises that has the potential to cause harm to the invitee. Unlike a typical hazard, COVID-19 is an “invisible” hazard that cannot be seen simply by having an employee walk through areas of the business looking for any hazards (such as a liquid on the floor) that could potentially harm a customer. Thus, the focus will likely be what reasonable steps the business took to protect the customer from the COVID-19 hazard.

As an essential business owner, what reasonable steps can one take to limit liability in this context?

Any business owner should consult the CDC and local health guidelines to determine best practices for combating COVID-19. Compliance with each of these steps should be well-documented by an employee on the premises on a regular basis. The key will be to show that, on a particular day, the business took the steps it identified to protect its customers. Such precautions could include:

  • Providing protective equipment, such as masks and gloves, to its employees to prevent the spread of disease to customers.
  • Pre-screening employees for temperature and assess symptoms prior to entering the facility.
  • Social distancing both employees and customers to maintain six feet of separation when possible.
  • Cleaning and disinfecting all areas of the business including bathrooms, common areas and shared electronic equipment routinely.
  • Depending on local rules and recommendations, requiring all individuals who enter the premises to wear a mask or other facial covering.

It is important to note that implementing procedures such as those identified above will also serve to protect employees and likely reduce potential threats of lawsuits from employees.

What consideration should be given to the discovery undertaken after a lawsuit has been filed?

While the COVID-19 virus is novel, traditional discovery methods are still applicable. First, specifically tailor your written discovery requests to information such as:

  • All public places and other businesses the plaintiff visited during the day in question and in the weeks prior and subsequent to the plaintiff’s visit to your business;
  • All interactions the plaintiff had with people at your place of business and other places the plaintiff visited in the weeks prior and subsequent to the plaintiff’s visit to your business;
  • Knowledge as to whether there were diagnoses or symptoms of COVID-19 at other locations and among people with whom the plaintiff interacted during those weeks;
  • The day and time the plaintiff visited your business, including all employees working during the time of the plaintiff’s visit;
  • Interactions with delivery services that came to the plaintiff’s residence, or if the plaintiff resides in an apartment building, deliveries to the building as a whole in the weeks before and after the date in question;
  • Cell phone records to track the movement of the plaintiff in the weeks prior to diagnosis; and
  • Movements and the health of all living with the plaintiff in the weeks prior to the plaintiff’s diagnosis.

Specifically tailored document requests should also be considered, such as:

  • Documentation, such as receipts, concerning the plaintiff’s visit to your business;
  • Documentation supporting interactions the plaintiff may have had at other business or public places;
  • All medical records concerning the plaintiff’s COVID-19 diagnosis and any underlying medical conditions the plaintiff may have;
  • FOIA requests to county health departments for each county the plaintiff visited weeks prior to the plaintiff’s visit to your business to identify additional potential sources of exposure.

Likewise, in preparation for discovery, a business should consider those materials it will likely need to produce to the plaintiff, such as:

  • Documentation of all steps taken to comply with CDC and local health department directives;
  • Documentation of compliance with state, county and city regulations related to COVID-19;
  • Documentation of daily cleaning and disinfecting efforts at the premises; and
  • Documentation of an employee or customer who was diagnosed with COVID-19 after visiting the premises, and if so, what actions were taken to disinfect the premises and protect future employees and customers.

What potential causes of action does an employee have against an employer and what steps can the employer take to help limit its liability?

As essential businesses are required to stay open, these businesses face a unique challenge to protect their employees during this crisis. What steps can an employer take to help prevent COVID-19 sickness and death while also limiting liability in the unfortunate scenario that an employee does get sick or dies?

Recently a Walmart store in Evergreen Park, Illinois, was in the news because some of its employees became sick and exhibited symptoms of COVID-19. Unfortunately, two employees at that store who contracted COVID-19 passed away. A lawsuit was filed in Cook County, Illinois, alleging causes of action for negligence, willful and wanton misconduct, and wrongful death. The plaintiff has alleged that Walmart violated the duty of care by failing to, among other things: clean and sterilize the store; implement and enforce social distancing guidelines; provide personal protective equipment; warn employees that various individuals who were at the store were exhibiting symptoms of COVID-19; follow OSHA safety standards related to COVID-19; follow guidelines promulgated by the CDC; and conduct inspections on the condition and cleanliness of the store.

This lawsuit is a call to action of the need to quickly implement the procedures promulgated by the CDC and local health authorities and document these procedures on a regular basis. Not only will a strict implementation and documentation help protect a businesses’ employees during this time, it will also help defend a lawsuit should one be filed due to an employee or customer contracting COVID-19.

In defending these actions, there will be various issues that will need to be considered when determining a responsive pleading strategy. These include union rules, employee regulations, and state workers’ compensation laws. For example, in Illinois, every employer that employs even one employee is required to carry workers’ compensation insurance. Thus, almost every employee of an Illinois business is covered by workers’ compensation insurance (with some statutory exceptions). Further, under Illinois’ workers’ compensation statute, exposure to substances that can lead to illnesses or disease are covered, including who have pre-existing conditions. As such, in addition to lawsuits, there are likely to be a stream of workers’ compensation claims for even minor injuries related to COVID-19. Each state’s workers’ compensation laws will need to be assessed to determine what the employer may owe an employee for a COVID-19 related illness.

This pandemic presents new and unique challenges that a business must face concerning how to balance government orders, Centers for Disease Control and local government guidance on prevention, nervous customers and nervous employees. It is unclear how long these issues will persist. Essential businesses need to develop a protocol to face these new challenges head-on as they continue to serve customers, protect their employees and keep their businesses afloat.

Author: Matthew Dowling (Associate, Chicago) Editor: S. Christopher Collier (Senior Partner, Atlanta)

Hawkins Parnell & Young's national litigation team is helping businesses across the United States navigate unprecedented legal challenges arising from the COVID-19 pandemic. Visit our COVID-19 Resource Center for the latest insights and guidance.