Model Policy Provides Tort Immunity for Businesses Operating During a Declared Public EmergencyJuly 1, 2020 – Article
The American Legislative Exchange Council (“ALEC”) has approved and published a model policy entitled the Liability Protection for Employers in a Declared Disaster or Public Emergency Act. The model policy is designed to protect business owners operating during a declared public emergency, such as COVID-19. The goal is protection from potential lawsuits grounded in negligence if the business complies with, or makes a good faith effort to comply with, applicable rules, regulations, or guidelines enacted to protect public health and safety.
What is a model policy?
A model policy is a draft of legislation that is intended to serve as a guide for federal and state governments to adopt into official law. It provides a starting point that can be altered to fit the specific needs of the adopting government. Model policies also provide uniformity of policies across states. A model policy is a model only and, thus, becomes law only if, at the federal level, it is passed by Congress and signed into law by the President, or at the state level, passed by the legislature and signed into law by the Governor.
What benefit would the Liability Protection for Employers in a Declared Disaster or Public Emergency Act provide?
Under the Pubic Emergency model policy, business entities are immune from “civil liability and professional disciplinary action for any action or inaction as a result of, in response to, or arising out of a disaster or emergency declared at the federal, state, or local level if the person complied with or made a good faith effort to comply with federal, state, or local regulations, executive order, or guidance or complied with federal or state statues passed or issued in response to the disaster or public emergency and applicable to the activity at issue.”
In some locations, multiple statutes, regulations, executive orders, or guidance may apply to a business’s operations. In those cases, compliance or a good faith effort to comply with any of the applicable rules, regulations, or guidance passed or issued in response to the declared public emergency would trigger immunity under the model policy.
In addition to laws, executive orders, and regulations, the model policy also provides protection for businesses who comply with guidance issued by federal, state, and local authorities in response to a declared public health emergency. “Guidance” under the model policy is defined as “written guidance related to a declared public emergency that is issued by a federal, state, or local government authority including, but not limited to, the United States Health and Human Services including the Centers for Disease Control and Prevention or Food and Drug Administration, the United States Department of Labor including the Occupational Safety & Health Administration, U.S. Equal Employment Opportunity Commission, United States Department of Homeland Security including the Federal Emergency Management Agency, United States Environmental Protection Agency, United States Department of Education, United States Department of Treasury, United States Department of Commerce, the state, a political subdivision, or any state or local department, agency, board, or commission.” 
Who would the Liability Protection for Employers in a Declared Disaster or Public Emergency Act protect?
The model policy is drafted to cover essentially any entity or person who conducts business during a declared public disaster or emergency. “Person” under the model policy is broadly defined to include businesses and their employees, agents, or representatives operating in both the private and public sector. This includes natural persons, partnerships, corporations, companies and limited liability companies, trusts, estates, nonprofit and for-profit organizations, or any other business entity that does not fall within the previously listed categories. The state, political subdivisions, emergency management agencies, or other state agencies including but not limited to universities are also covered under the model policy.
Would the Liability Protection for Employers in a Declared Disaster or Public Emergency Act provide absolute immunity for businesses?
No, the model policy does not provide immunity for recklessness or willful misconduct. This means that any conduct rising above mere negligence could potentially be subject to liability. The model policy does not define “recklessness” or “willful misconduct”; therefore, whether conduct falls under either of these categories would be determined by the jurisdiction in which suit is brought.
Generally, under civil law, willful misconduct is intentionally causing harm by acting or failing to act with actual knowledge that the conduct will cause injury. On the other hand, conduct is considered reckless if an act or failure to act creates an unjustifiable high risk of harm that is either known or so obvious that it should be known.
Additionally, the model policy would only shield against negligence only claims related to acts or omissions taken in response to a declared public emergency, and not general negligence related to common hazards. For example, a restaurant accused of being the source of viral infection by a customer would be immune from tort liability if it is shown that the restaurant followed all the proper laws and guidelines to help prevent the spread of a virus. However, that same restaurant could be liable for a negligence claim arising out of a slip and fall from a spilled drink. Furthermore, immunity would only apply during the designated emergency period.
A similar policy protecting vaccine manufacturers during declared public emergencies has been around for several years. In 2005, President George W. Bush signed into law the Public Readiness and Emergency Preparedness Act (“PREP Act”) which authorizes the Secretary of Health and Human Services to issue a declaration that provides immunity from tort liability for claims of loss caused or relating to the use of countermeasures against diseases or other threats of public health emergencies. The purpose of the PREP Act was to encourage the rapid production of countermeasures to protect the public during declared public health emergencies. On March 17, 2020, the Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19 was issued. The PREP Act provides immunity for negligent, as well as reckless, conduct.
The Liability Protection for Employers in a Declared Disaster or Public Emergency Act would provide limited tort immunity to all businesses, not just those involved in the healthcare sector. It is an attempt to address the conflict related to balancing the need to protect public health and safety during viral pandemics like COVID-19 with the need to protect the economic interests of businesses and workers. As local governments begin lifting restrictions on economic and social activity and businesses begin to reopen, adoption of this model policy by state legislatures would allow business owners to feel comfortable operating in the current environment without the threat of lawsuits from either customers or employees who may claim they contracted the COVID-19 on the business’s premises.
With or without the protections suggested by the Liability Protection for Employers in a Declared Disaster or Public Emergency Act, it is still important for employers operating in declared disasters or public health emergencies to become familiar with the laws, regulations, and federal and local guidelines applicable to their business or profession and take responsible actions to ensure both customer and employee safety when it comes to reopening.
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