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Businesses wrestle with liability issues surrounding reopening

Questions about liability and a lack of clear guidelines around the coronavirus pandemic are creating uncertainty for businesses as they move forward.
Image: \"Non-Essential\" Businesses Start Re-Opening In Georgia Amid COVID-19 Pandemic
A man sits at the counter for dine-in service while other seats are marked off for social distancing protocol at the Waffle House on April 27, 2020 in Brookhaven, Ga.Jessica McGowan / Getty Images

Courtney Surber Paz, an Atlanta-based event planner, has four weddings left on her schedule this year after the coronavirus pandemic forced most clients to cancel. But she's not quite sure how to move forward.

While Georgia has recently set standards for how food and beverages can be safely served, questions about dancing and mingling at a wedding remain. And there's been little information on the issue of legal liability if a guest were to later fall ill.

“Do we make people sign a waiver? It’s on everyone’s mind,” Surber Paz told NBC News. “We’ve gotten so little guidance, I feel like there needs to be a master plan for this whole thing.”

The issue of liability is vexing businesses across the country and has even reached into President Trump’s campaign. Supporters hoping to attend his rally Saturday in Tulsa, Oklahoma are being asked to sign a waiver promising not to sue if they contract the virus there. It’s a layer of protection for the campaign, but also reflective of the White House’s approach to policy around the pandemic.

The president’s top aides and Republicans leaders have insisted that Congress pass new legal protections for businesses, to give owners confidence they won’t be held liable for damages if workers or customers become ill.

The so-called “liability shield” has proven divisive. While major industry groups are backing such a measure to help jumpstart the recovery, unions warn it would discourage companies from properly protecting workers in dangerous settings. But there’s still no proposed legislation on the issue, and the Trump administration has been reluctant to issue new safety rules that would guide businesses as they reopen.

In interviews with NBC News, many employers described confusion and concern about how to safely return to work, especially when it comes to people with health conditions that might make them more vulnerable to COVID-19, the illness caused by the virus.

Susan Rondou, whose 20-person firm manages property tax filings for homebuilders across the West, has fully reopened the firm’s suburban Los Angeles office after weeks of lockdown. But Rondou said she’s still seeking guidance on whether she faces legal liability if an employee becomes infected at work.

“I don’t know anything else but to cover ourselves by putting something on our door, telling employees, ‘You are aware of the risks when you come in here, if you come down with COVID,’” Rondou told NBC News. “I’ve been looking for a policy to put in place. We are just muddling through the water at this point.”

Policies that could answer her questions have been slow to emerge.

The federal government hasn’t released safety rules that lay out new concrete standards on how to protect workers and customers, instead putting out optional guidelines. At the same time, the White House and GOP congressional leaders have demanded new protections to prevent a wave of lawsuits.

Some observers are worried the absence of clear requirements for both safety and liability could stunt economic growth.

“Without federal protocols for workers and protections for businesses, too many Americans will be concerned about going back to work, and too many businesses will be reluctant to reopen; That would deepen and prolong the health and economic pain the coronavirus has brought,” businessman and former New York City Mayor Michael Bloomberg told NBC News. “We need Congress to step in and prevent this — and quickly."

The U.S. Chamber of Commerce, along with trade groups representing industries like restaurants, hotels, and retail stores, are requesting protections from lawsuits that they worry could discourage owners from reopening and leave them on the hook for damages.

“This is perhaps the largest area of concern for the overall business community,” the Chamber's president, Suzanne Clark, wrote in a letter to members in April.

But labor groups and others worry that shielding businesses from liability would discourage safety measures and even slow the recovery. Workers have been alarmed by mass outbreaks at meatpacking plants, which the White House has ordered to remain open to prevent disruptions to the food supply.

"Simply put, no company should be shielded from responsibility for adopting irresponsible practices that foster the spread of COVID-19 through their facilities,” Anthony Marc Perrone, President of the United Food and Commercial Workers International Union, said in testimony at a Senate hearing last month.

The AFL-CIO, the umbrella labor group, sued to force the federal government to implement emergency safety standards related to coronavirus, but their argument was rejected by a federal appeals court last week. The Department of Labor has argued its existing rules are sufficient for now, but has announced it would increase workplace inspections related to COVID-19.

The Chamber of Commerce has lobbied against new safety regulations, but has complained that businesses are facing a confusing array of conflicting local, state, and federal guidelines and could benefit from a more uniform set of rules and recommended practices.

Small businesses, meanwhile, are worried new rules could be costly and more difficult to implement than for their larger competitors, many of which have huge e-commerce platforms and the resources to pay for extra safety protections.

A CNBC/SurveyMonkey poll of small business owners in May found a 12-point jump in concerns that they’ll be negatively affected by upcoming regulations.

The National Federation of Independent Businesses is also calling for liability protections, citing widespread fears about lawsuits in their own member surveys.

Senate Minority Leader Chuck Schumer has argued that the federal government’s top priority on workplace safety should be expanding the availability of coronavirus tests.

“So many companies and businesses are eager to open but without a strong national testing regime, it takes everyone more time and makes it much harder to safely reopen,” Schumer told NBC News in a statement. “Our view is that the federal government should provide enough tests to ensure that every business can safely open and every employee can feel safe returning to work.”

There may be some room for compromise. Even many proponents of liability protections have said it should be paired with a set of clear standards that businesses could meet to reliably stave off lawsuits, an approach Bloomberg favors.

"To protect the health of U.S. workers, the federal government should establish safety protocols for businesses to follow,” Bloomberg said. “And companies that follow them in good faith should receive safe harbor from legal liability.”

Senate Majority Leader Mitch McConnell has insisted liability protections must be in the next relief package, but has also suggested such provisions might be temporary.

“We're not talking about rewriting every tort law in every state in America, but narrowly crafted liability reform related to this coronavirus pandemic that begins and ends at a certain time and can reassure these folks that they're not going to be hit with an avalanche of lawsuits,” McConnell told reporters.

Already there have been some legal accommodations for specific industries. In New York, a measure in the state budget in March granted broad legal protection to nursing homes and other health care services has drawn criticism after coronavirus outbreaks killed thousands at long term care facilities.

Several states have also implemented more general legal protections. Utah passed a law last month providing protection to businesses from civil damages except in cases of “willful misconduct” or “reckless infliction of harm.” But given the lack of case law on coronavirus infections, some legal experts think provisions like Utah's might still prompt lawsuits testing what falls under those exceptions.

Adam White, a fellow at the American Enterprise Institute, told NBC News that lawmakers could likely address business concerns, but needed to be careful of unintended consequences. In addition to the need to ensure workplaces are safe, a new liability protection that's perceived as too deferential to employers could send a signal to customers that it’s too dangerous to return to their neighborhood store.

“If the point of all this is to get the economy running, then yes we want businesses to open their doors, but we want customers and employees to feel confident walking through them,” White said.