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Liability immunity is a key issue for the next stimulus package

Exterrior of the US Capital building. Washington DC

Exterrior of the US Capital building. Washington DC Sept. 13, 2018.. Credit: Mark Abraham

WASHINGTON — A partisan battle over whether to pass a measure to protect employers from lawsuits or workers from contagion from the novel coronavirus pandemic awaits Congress when it returns to Capitol Hill Monday.

That choice and its ramifications for reopening the economy stand out as one of the thornier issues for Republicans and Democrats as they negotiate another massive $1 trillion-plus coronavirus stimulus aid package.

Lawmakers will spend the next few weeks debating the best way to restart the economy, reopen workplaces and send children back to school while trying to ensure health and safety amid upticks in coronavirus cases in California, Florida and Texas, among others.

That debate comes as more offices, shops and plants open for business — and many employers say they fear they’ll face frivolous coronavirus-related lawsuits, while many employees worry that they’ll encounter inadequate workplace health and safety measures.

Senate Majority Leader Mitch McConnell (R-Ky.) insists the next bill must include protection for businesses, schools and hospitals against unwarranted coronavirus-related lawsuits, a position supported by the White House.

“No bill  will pass the Senate without liability protection for everyone related to the coronavirus,” McConnell said in Kentucky on Monday.

House Speaker Nancy Pelosi (D-Calif.) said the Senate should approve a measure in the $3 trillion HEROES Act the House passed in May to require the Occupational Safety and Health Administration to issue a temporary emergency standard for coronavirus safety at workplaces.

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 “That's a much better way to go about this than all of this immunity,” Pelosi said last week.

Limiting liability

McConnell and Sen. John Cornyn (R-Tex.) have crafted a proposal that would raise the standard for lawsuits over worker COVID-19 infections or workplace conditions against businesses, health care providers, schools and nonprofit organizations.

Under the proposal, workers filing lawsuits over infections or working conditions would have to prove that their employers demonstrated gross negligence or intentional misconduct. Employers would not be held liable if they proved they made reasonable efforts to comply with public-health guidelines.

The lawsuits would face a higher burden of proof of clear and convincing evidence, heightened pleading standards and a cap on damages, according to the Wall Street Journal, which first reported the draft measure.

The protections would be backdated to December 2019 and last through 2024 or until the expiration of the emergency declaration.

"Nobody should have to face an epidemic of lawsuits on the heels of the pandemic that we already have related to the coronavirus,” McConnell told Kentucky reporters.

The U.S. Chamber of Commerce made “timely, temporary, and targeted liability relief” its top priority in a letter it sent Thursday to President Donald Trump, McConnell and Pelosi.

“What we’re recommending is a safe harbor to liability for those businesses, universities, nonprofits and other entities that follow CDC and state and local guidance on things like social distancing and use of PPE,” said Harold Kim, president of the chamber’s Institute for Legal Reform, in a call with reporters Thursday.

“If they're trying to do the right thing, they shouldn’t be sued,” he said.

Setting a standard

The Democrats’ measure requires OSHA to issue a temporary emergency standard within seven days, which would last for six months before a permanent standard would have to be approved. States would have to adopt OSHA's temporary standard within 14 days.

The standard requires employers to develop and put into effect infection-control plans to protect workers based on CDC and other expert guidance, and bars retaliation against workers for reporting infection control problems to employers, public authorities or the media.

“Everybody is protected by a strong OSHA standard — the employer if he implements it, the employee because he’s safer, and customers and clients who may come into the place of business as well,” Pelosi said.

The AFL-CIO has made the temporary emergency standard a priority since March, but the Labor Department has turned down its petitions and the courts rejected its lawsuits.

“These standards are critical to provide both employers and workers clear and comprehensive direction from the federal government on the measures that are needed and required to protect workers from this new and grave workplace hazard,” AFL-CIO president Richard Trumka wrote to Labor Secretary Eugene Scalia in April.

Rebecca Reindel, the AFL-CIO’s director of occupational safety and health, said OSHA could issue a standard for infectious diseases in hospitals and other workplaces that has been worked on since 2010. The Trump administration halted work on it in 2017.

Would employers be better protected by an OSHA standard than the current CDC and OSHA guidance and a general duty clause to ensure their employees create a safe place to work?

“If they met it, they would,” she said.

Complaints and lawsuits

The groups supporting an OSHA standard, including trial lawyers and public interest advocates, suspect economically hard-pressed or unscrupulous businesses will take shortcuts on worker safety — and they are skeptical of OSHA under the Trump administration.

So far, employees have filed 6,770 coronavirus-related complaints with OSHA as of July 15, according to the agency’s website.

Scalia, who oversees OSHA, said guidelines are better than a national standard. “Guidelines allow flexibility and responsiveness to that change, in a way a rule would not,” he told the AFL-CIO in a letter.

But labor and its allies are skeptical. President Donald Trump has never appointed a Senate-approved director for OSHA, whose staff shrunk by nearly a tenth from 2016 to 2019.

And at the end of May, OSHA’s acting director told a House hearing that in response to the 4,500 complaints then filed, OSHA had issued one citation — for a record-keeping error.

Meanwhile, groups representing businesses, health care facilities, and schools and universities say they are bracing for a flood of coronavirus lawsuits. Larry Kudlow, an adviser to President Donald Trump, said the threat of such suits could slow the economic recovery.

A total of 3,512 coronavirus lawsuits have been filed in state and federal courts across the country from January to mid-July, according to a tracking system run by the law firm Hunton Andrews Kurth.

Yet the tracker found that just 302 of the cases are based on labor and employment issues — most are by prisoners seeking release, businesses suing insurance companies, and other matters.

“There have not been many of those,” said Torsten Krach, a partner in the firm who helped create the tracker, though he added that it’s a very real concern for businesses as they think about reopening.

“One of the reasons may frankly just be because businesses are just reopening now,” he said. “And another one may be, those are going to be tough cases to prove because it’s going to be hard to pinpoint where somebody contracted the virus.”

Compromise?

Though the issue will be before Congress next week, state legislatures across the country also are wrestling with how to protect businesses, employers, shops, restaurants and medical facilities from frivolous lawsuits while also ensuring the safety of the workplace.

Thirty states have provided some level of immunity — most often for health care providers, hospitals and essential workers — through legislation or executive orders. And states are beginning to set their own standards — Virginia became the first to do it last week.

One possible compromise in Congress might be to approve an OSHA standard that would protect employers who follow it from liability lawsuits.

A letter signed by six Democrats and six Republicans in the House to congressional leaders last week urged them “to implement targeted and limited-time COVID-19 liability protections” for health care providers and businesses that follow health and safety guidelines.

And 10 House Republicans wrote House Minority Leader Kevin McCarthy (R-Calif.) last week suggesting this deal: “Simply put, if businesses abide by the OSHA standards, they should be protected from baseless lawsuits.”

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