Analysis

Employer Liability Shield Makes Debut In GOP Virus Proposal

By Jon Steingart
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Law360 (July 27, 2020, 9:55 PM EDT) -- Employers that follow guidance for protecting workers from COVID-19 would get an extra layer of protection from negligence lawsuits, under a Republican proposal introduced Monday that would also cut unemployment benefits.

Senate Majority Leader Mitch McConnell, R-Ky., introduced the measure on the Senate floor, insisting that protections will take some pressure off so "employers can spend their next months actually reopening rather than fighting for their lives against frivolous lawsuits."

"We'll preserve accountability in the event of gross negligence or intentional misconduct, but we're not going to let trial lawyers throw a party on the backs of the front-line workers and institutions who fought this new enemy on the front lines," McConnell said.

Under the proposal, lawsuits claiming people contracted the novel coronavirus at work because the business undertook inadequate worker protection would have to overcome a standard higher than what's ordinarily required for negligence suits. The higher standard would also apply to personal injury and medical malpractice suits.

Additionally, the measure would let employers remove these suits, which typically are heard in state court, to federal court, as well as immunize employers from unintentional violations of other employment laws on occupational safety and health, minimum wage and overtime, and discrimination.

The release Monday of the GOP's $1 trillion coronavirus relief package marks the starting point for cross-party negotiations. Democrats staked out their opening position with the $3 trillion Heroes Act, which the House passed in May.

If passed, the liability shield legislation would provide businesses with some assurance that they will be protected if they follow public health guidance and something goes wrong anyway.

That creates a giant loophole because the Occupational Safety and Health Administration and Centers for Disease Control and Prevention have been issuing weak guidance that includes so many ambiguities that they don't really require anybody to do anything, according to Hugh Baran, a staff attorney at the worker advocacy group National Employment Law Project.

"They don't actually require employers to do anything," Baran said. "You can make reasonable efforts to follow these guidelines by doing nothing at all."

OSHA in June published guidance that couched recommendations in phrases such as employers should "consider" adopting social distancing strategies and maximize telework "to the extent feasible." It has not issued an emergency temporary standard that would carry more force and has beat back the AFL-CIO's effort to force it to do so.

"OSHA has completely abdicated its responsibility in this pandemic and so employees are completely on their own," Baran said.

A liability shield could be instrumental to smaller and medium-size businesses that are less capable than major companies of bearing the costs of responding to the pandemic, according to Mark Wilson, chief economist and vice president of health and employment policy at the HR Policy Association. The association's members include large employers.

"Some legal liability reform would be helpful for employers in reopening their establishments," Wilson said.

A related form of help for employers would be to improve virus testing so they aren't forced to carry this cost on their own if they want to include routine screening as part of their safety plans, Wilson said.

"I would like to see some assistance for testing, some additional funding for testing, particularly when it comes to the public health surveillance aspect of testing," he said.

The Republican plan allocates $25 billion to boost state testing programs. It also includes liability protection for businesses whose workers are injured by testing.

In March, Congress passed the Coronavirus Aid, Relief and Economic Security Act, or CARES Act. One of its provisions, which expires at the end of July, created a pandemic unemployment insurance fund that provides a $600 per week enhancement on top of the regular benefits each state pays out.

Those benefits are vital because they support not only the unemployed workers who receive them, but also help prop up the businesses where they spend the dollars, Michele Evermore, a senior policy analyst at NELP, said.

"This is money that's going straight into the economy," Evermore said. "People are spending it the same week that they get it."

The GOP proposal would renew pandemic unemployment benefits at $200 per week for two more months. That's intended to give state unemployment offices time to set up a system to distribute benefits that would be pegged at 70% of unemployed workers' prior earnings. Dubbed "wage replacement," the idea is to extend a lifeline while avoiding incentivizing people to stay out of work by ensuring they don't make as much or even more while unemployed.

The enhanced unemployment benefits workers have been receiving have made it harder for employers to bring people on board because they can't always compete with the enhanced benefit, according to attorneys who represent employers.

"Employers wanting to hire have found it difficult at times to do that at the current level," David Garland, chair of Epstein Becker Green's employment, labor and workforce management practice who works in its New York and Newark offices, told Law360

The Republican plan released Monday would cut the federal unemployment benefit to $200 per week. By contrast, the Heroes Act extends the $600 boost through January 2021. Both proposals include another round of $1,200 payments to Americans.

Unemployment benefits are receiving renewed focus in part because the U.S. Department of Labor's weekly tally of first-time claims ticked upward this month, reversing a decline that had been underway since a record high of 6.9 million in late March. The most recent jobs report, on July 2, showed the unemployment rate at 11.1%.

--Additional reporting by Andrew Kragie and Braden Campbell. Editing by Breda Lund and Kelly Duncan.

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