Re-Opening Risks and Liabilities for Businesses in the Era of COVID-19*

Emily J. Meister

As businesses throughout North Carolina begin to plan for and undertake re-opening, concern for the safety of customers and employees is a central focus for many. Prudent businesses of all types or areas including, for example, realtors, management companies, construction companies, retailers, and accountants or other professionals, should also pause to consider and understand their potential liability to those customers, employees and third-parties they serve, utilize and otherwise come into contact with while fulfilling their business functions. A business’ risk, however, isn’t as straightforward or simple as most of us would assume or like, and assessing your potential liability requires analyzing both federal and state laws and legal causes of action. Your potential liability may further be impacted by who your business is dealing with – a customer, employee or random third-party.  For example, smart businesses should be cognizant of the following potential avenues of liability:

Occupational Safety and Health Administration (“OSHA”)

  • Generally speaking, OSHA regulations require employers to provide their employees with reasonably safe working conditions free from known dangers. In light of the pandemic, OSHA has periodically released guidance to employers on steps that can and should be taken to promote a safe work environment and to minimize risk of exposure to COVID-19 in the workplace. Businesses should carefully consider what steps can be taken to minimize the risks for their particular businesses, as some of the recommended steps may not make sense for your particular business and other additional steps not identified by OSHA may be appropriate. 
  • While OSHA regulations do not provide a private cause of action that can be brought by impacted or wrongfully endangered employees, it does allow such individuals to file a complaint, which may trigger costly investigations and penalties. Moreover, adverse findings resulting or coming from any OSHA investigation can often be used in other legal proceedings brought by employees or customers (for instance, in workers compensation or negligence proceedings).

Families First Coronavirus Response Act (“FFCRA”)

  • As more people venture out of their homes, experts warn that new cases of infection will occur and may actually increase, potentially sickening the employees upon which businesses rely to function. The FFCRA continues to run through December 30, 2020, and provides employees of covered employers (typically those with less than 500 employees) with paid sick and other leave related to COVID-19. While tax credits are available to most employers, employers should be prepared to address or cover the costs of such potential leave. 

Negligence and Workers Compensation

  • Common law imposes upon most businesses a duty of reasonable care not to unnecessarily expose their customers, suppliers or other persons visiting their establishment to dangerous situations and to warn such persons of any hidden dangers. Those who breach such duty or are otherwise negligent would, in most instances, normally be liable to customers and visitors for the resulting damages suffered. Or, if the injured party was an employee, the employee may be able to pursue and recover his or her damages through workers compensation proceedings.
  • To help alleviate the potential liability of essential businesses, the North Carolina General Assembly recently took action. Pursuant to N.C. Gen. Stat. § 66-460, essential businesses providing services shall be immune from civil liability to consumers, customers, users and employees for injury or death caused by COVID-19 contracted through such essential business unless such injury or death was the result of gross negligence, reckless misconduct or intentional infliction. Hence, businesses that utilize reasonable and regular cleaning and safety procedures and routinely re-evaluate whether the steps they are taking are appropriate or need to be modified as circumstances change are likely offered protection from common law negligence under the above statute, while businesses that knowingly refuse to implement safety procedures, ignore changing circumstances, and disregard clear or easily recognizable risks may run the risk of being found to have acted in a grossly negligent or reckless manner. In either case, to N.C. Gen. Stat. § 66-460 does not prevent or prohibit employees from asserting claims under workers compensation policies in effect and would not negate or do away with any potential liability to employees, customers or visitors under any applicable federal laws.

As your business continue to navigate the phases of re-opening and manage the impacts of COVID-19 has had on their business, Black, Slaughter and Black’s attorneys remain on the job and ready to you stay on top of developments, minimize risks and maximize opportunities for the success of your business.  

*Please be aware that federal, state and local responses to COVID-19 are changing quickly. The advice set forth herein is based upon the facts, guidance and laws available today.  Future developments may render this article and advice outdated.