As we are nearing the holiday session, there is no clear date for businesses and activities to fully reopen across the United States and California. More and more attention has been given to what protections businesses have from COVID-19 related lawsuits.
Many businesses find it a necessity to reopen during this time of uncertainty in order to simply avoid going out of business, they must do something to pay their rent, insurance, and other financial obligations. With the pressure of reopening, businesses are rightfully concerned that they will be named a defendant by an employee or a customer who contracts COVID-19 and claims that the virus was contracted while working at or visiting the business establishment.
Here are five issues California businesses must understand regarding the legislative environment of COVID-19 liability, and the potential to have employees or customers waive liability related to contracting COVID-19.
LEGAL LIABILITY SHIELD ON THE FEDERAL LEVEL
A new federal law is being proposed to create a safe harbor for businesses, including colleges and universities, that follow federal or state guidelines for COVID-19 to protect them against lawsuits. This legislation may be included in the next coronavirus economic relief bill and it is proposed that the law be retroactive to December 2019 and terminate in October 2024.
CALIFORNIA LEGISLATION CREATING PRESUMPTION THAT EMPLOYEE CONTRACTED COVID-19 AT WORK
In direct opposition to proposals on the federal level to protect employers, California has implemented and is looking to continue presumptions that an employee contracted COVID-19 at work if they are infected. Governor Gavin Newsom plans to work with the legislature to expand workplace protections, including guaranteeing COVID-19 related sick leave, easing workers’ compensation claim requirements, enforcing labor laws and ensuring employers are reporting outbreaks. SB 1159 would add coronavirus related illness or death to the list of on the job injuries covered under the state’s workers’ compensation program while removing a requirement that workers prove they contracted the virus on the job. Instead, employers would have to prove that COVID-19 wasn’t contracted in the workplace.
In response to a lack of a federal liability shield and California’s potential extension of a presumption that an employee contracted COVID-19 at work, many employers are seeking some type of potential protection and have asked if a liability waiver by employees is a viable option. Private parties may enter into agreements to limit liability for either party’s negligence and these agreements are generally enforceable. In the employment context the waiver’s enforceability may be more limited. For example, the California Labor Code requires employers to indemnify employees for losses caused by the employers’ “want of due care” and prohibits any waiver of this right.
LIMITS OF LIABILITY WAIVERS IN CALIFORNIA
California law is clear that workers compensation claims cannot be released as a matter of law. Failure to comply with mandatory safety requirements and guidelines could also impact the enforceability of liability waivers. If a company does not follow health and safety guidelines, it could be argued that the actions were grossly negligent actions, which cannot be subject to be released or waived. Generally, California law does not favor waivers and will be strictly construed against the party drafting them.
LIABILITY WAIVERS FOR CUSTOMERS
Outside of the employment context, liability waivers are likely to be more enforceable, but companies must remember that California law does not favor waivers and a court will scrutinize any contract that seeks to waive liability, and no case law has yet addressed whether some unique aspect of COVID-19 would remove it from the general category of risks for which liability can be waived.
The longer the virus is present and absent any federal law granting businesses a liability shield, liability waivers may become more common.
You may download a free liability waiver form from www.GoLegalYourself.com
For more information on how to legally start and grow your business please visit my website at www.golegalyourself.com