The COVID-19 pandemic has killed 100,000 Americans so far, left millions jobless, and caused one of the greatest economic crises in history. As we write this, in late May 2020, the first bits of good news are beginning to percolate into the public sphere. In New York, efforts to flatten the curve appear to be working, and cases that were once increasing exponentially are now on the decline. By all indications, social distancing efforts have been more effective than anticipated, and, despite the grievous loss of life, there is reason to hope that the direst predictions will not come to pass.
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Explore This IssueJune/July 2020
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Despite the good news, a great deal of uncertainty remains. That uncertainty extends to all aspects of our lives, from health to economics to education to national security. Meanwhile, food companies, from restaurants to grocers to manufacturers, are experiencing extreme duress due to disruptions caused by mandatory closures, travel bans, and quarantines. Even as some businesses are experiencing unusually high demand, others are pausing operations due to the emergence of illness.
Unfortunately, it is all but certain that we will continue to face extraordinary challenges in the weeks and months to come. This article will discuss two of the many legal issues, challenges, and changes that have been brought to the forefront by the COVID-19 pandemic.
Employer Liability Lawsuits
Food companies have been confronted with the difficult question of how to safeguard employees from COVID-19 while remaining fiscally viable. This is an extremely complex issue without easy answers. Food companies must balance the safety and well-being of employees with the economic realities and the needs of the nation. Unlike in some other business sectors, working remotely is simply not feasible for most food industry positions. Moreover, the industry at large simply does not have the liberty of instituting a wholesale shutdown.
One of the most perplexing issues facing the food industry is that of employer liability for COVID-19 illnesses. More specifically, the question is to what extent can companies be held liable if their employees become infected in the course of their employment. Many legal analysts are predicting an onslaught of lawsuits in the months to come. These lawsuits would ostensibly take many forms. One common type of lawsuit would be for injunctive relief, meaning, for instance, that employees could sue to demand the employer implement certain protective measures. Another type of suit would be for claims that an employee was sickened at work because of their employer’s negligence. Finally, employers may face class action lawsuits brought on behalf of a group of employees alleging an unsafe work environment.
To be sure, there are many legal and factual hurdles to overcome for such cases. For one, workers’ compensation statutes pose a significant hurdle for claimants seeking to bring tort claims against employers. In most states, injuries suffered at work do not give rise to tort liability. The question with COVID-19 is whether it constitutes a work injury. Some states have already enacted legislation to address this, but most have not. In Wisconsin, for example, the state has enacted a temporary law providing that when a first responder is injured by COVID-19 and had at-work exposures to infected individuals, the injury is presumed to be employment related.
Although worker’s compensation benefits are typically the exclusive remedy available to injured workers, there are certain exceptions that COVID-19 could conceivably fall into. For instance, many jurisdictions allow an exception for an employer’s intentional conduct toward employees. If a plaintiff’s attorney can establish that the aggrieved conduct was willful or deliberate, i.e., by arguing that the employer willfully chose not to implement OSHA’s COVID-19 guidance, a judge could rule in favor of the plaintiff.
Even if a plaintiff were able to overcome the legal intricacies associated with worker’s compensation statutes, they would still have an uphill battle. This is because the nature of viral spread would make proving causation especially difficult. COVID-19 is different from Salmonella or Listeria, where genetic fingerprinting can establish definitive connections between case-patients. Thus, it would presumably be difficult to prove an employee contracted the virus at work, as opposed to in the grocery store or at the park, for instance.
Nevertheless, defending lawsuits is expensive regardless of merit. The legal issues, like the virus itself, are novel. Because courts have not previously rendered judgment on these questions, it will take a substantial amount of time and effort to adjudicate the issues. That will translate to high costs. To prevent this from happening, commercial lobbying interests are advocating for a legislative solution. They want Congress to enact a COVID-19 liability shield that would preclude companies from being sued in relation to COVID-19. Similarly, the U.S. Chamber of Commerce is seeking a safe harbor from negligence claims for businesses that followed governmental guidance on COVID-19 in the workplace. Whether Congress will enact such a liability shield is unclear, and the topic remains the subject of bitter partisan rancor.
Attorneys tend to be leery of liability shields. One of our society’s abiding legal principles is that for every harm there is a remedy. In simple terms, this means that when a person’s unreasonable conduct causes injury, that person is legally responsible for redressing the injury. With the pandemic, however, a limited liability shield may be appropriate. COVID-19 is an unprecedented event. Food companies in particular have had to navigate the manifest difficulties of implementing new and frequently changing policies that have fundamentally reshaped how we move about the workplace and the world. While many businesses closed, food companies had to remain open. Despite the challenges, the food industry performed remarkably well in the face of extraordinary challenges. Given that fact, it would seem unjust to subject these companies to retrospective liability for reasonable conduct based on the best information available at the time.
Whatever happens with the legislature or the courts, the best way to protect employees and stave off lawsuits is to ensure the company is monitoring and observing governmental guidance and implementing responsible, science-based policies and procedures to safeguard employees.
Another area of potential concern relates to contractual liability. For the first time in modern history, the food industry is having to fundamentally reimagine the way it does business. The challenges of implementing change while navigating the ongoing pandemic will continue to result in at least temporary shortfalls in production, increased costs, and prolonged maintenance delays. Consequently, many businesses will not be able to meet their contractual obligations. Breaching a contract can result in a troubling array of business losses. Fortunately, from a legal standpoint, there are defenses available when a contractual breach is caused by an extraordinary event such as COVID-19.
Force majeure is a legal term of art, meaning “superior force.” In simple terms, it is a provision frequently incorporated into contracts that discharges the parties of their performance obligations in the event of an extraordinary event like COVID-19. Force majeure clauses do not protect against foreseeable risks such as market fluctuations or other common business risks. A pandemic, on the other hand, is precisely the type of unforeseeable event force majeure protects against. Thus, where a contract contains a force majeure provision and a party is unable to perform due to COVID-19, it is likely the provision would allow the party to be discharged of its contractual obligations.
Importantly, even when a contract does not contain a force majeure provision, a party may still have a valid defense based on a similar legal doctrine. The common law doctrine of supervening impracticability also permits a party to discharge its contractual duties. This defense is only available to the extent the party is not at fault for the impracticability. This defense is not available, however, if the contractual language specifically bars the parties from asserting it.
COVID-19 has fundamentally changed our lives in just a few short months. The food industry has done an incredible job of protecting workers while maintaining a safe and wholesome food supply, but additional challenges surely lie ahead, and there will likely be significant additional legal changes as time goes on. To prepare, companies should continue to monitor legislative developments, enact sensible and reasonable procedures and policies to combat the risk of illness, and review contractual relationships to identify potential problems.
Chappelle is a food industry lawyer and consultant at Food Industry Counsel, LLC. Reach him at email@example.com. Stevens, also a food industry attorney, is a founding member of Food Industry Counsel, LLC. Reach him at firstname.lastname@example.org.