This is article from our IEG Policy platform dated 13/05/20.

Senate Republicans are backing a push by the food industry and other businesses for liability relief from coronavirus-related lawsuits, but face opposition from Democrats, labor groups, and worker advocates who contend the requested immunity is ill-advised and unnecessary.

The Senate Judiciary Committee on Tuesday (May 12) held the first hearing on the liability concern, which has emerged as a major sticking point in negotiations over the next COVID-19 relief package. A long list of industry interests led by the US Chamber of Commerce - and includes major food and ag groups - have been furiously lobbying Congress for liability relief.

House Democrats refused to include immunity from COVID-19 lawsuits in their $3 trillion relief package released this week, but Senate Majority Leader Mitch McConnell (R-Ky.) has declared his support for the policy and warned that he won't move forward with a stimulus bill unless it includes liability protections.

Testifying on the behalf of National Association of Convenience Stores, Kwik Chek Convenience Stores CEO Kevin Smartt told lawmakers that essential businesses have had to contend with "constantly shifting and conflicting public health guidelines" from federal, state and local officials.

"Our business, and other essential businesses, that have made real efforts to do the right thing should not be punished with unfair lawsuits just because we kept our doors open for the American public," he said.

Echoing the call by other food groups - including the American Beverage Association, American Bakers Association, Food Marketing Institute, National Cattlemen's Beef Association, and North American Meat Institute - Smartt said the request is not for blanket immunity but for targeted and "very limited-time" liability protection from claims that businesses are responsible for workers or customers contracting the highly contagious virus.

"Lawmakers shouldn't let businesses that operate in good faith to keep their doors open be harassed by unsubstantiated claims," he said. "It would be tragic if we had to close our doors after doing so much to stay open because of exorbitant legal costs related to liability threats."

The head of the nation's largest food worker union took a different view and warned that "no company should be shielded from responsibility" for failing to take adequate steps to safeguard workers or customers.

"This is not about being anti-business it is about being pro-safety," said United Food and Commercial Workers International Union President Marc Perrone. "Immunity laws could send dangerous messages that the safety of these workers is not a company's responsibility."

A legal expert also told lawmakers to resist the call for liability protection. Only a handful of tort cases related to coronavirus have been filed and to plead such a case in court the plaintiffs have to be able to establish causation - to effectively prove where and how they got the virus, explained David Vladeck, a law professor at Georgetown University's Law Center.

"There is no way in the world they are going to be able to," he said. "The best way to protect the public and business is to force our public health agencies to provide specific detailed, sector-related guidance about how to reopen this economy safely. Then they are protected from liability as they should be."

Federal rules needed

Democrats echoed that criticism and said any legal uncertainty about liability is due to the lack of federal rules for workplace safety, noting that the Trump administration has refused to issue mandatory rules through either the Centers for Disease Control and Prevention (CDC) or the Occupational Health and Safety Administration (OSHA) to dictate what specific steps companies should take to protect customers and workers from COVID-19.

"Under state tort laws, a business that acts reasonably and follows workplace safety standards has a defense against liability and this is a powerful incentive for businesses to proactively work to reduce workplace harm," said Sen. Dianne Feinstein (D-Calif.). "That is why it is for the federal government to issue specific, COVID-related standards for workplaces. So far OSHA has failed to do so."

Smartt, Perrone, Vladeck and the other witnesses at the hearing agreed that enforceable rules from OSHA would help address the issue - as did Committee Chairman Lindsey Graham (R-S.C.).

Federal regulators must tell "employers what they need to do to protect the workers and hold them accountable if they don't," Graham said, adding that it "seems to me that one primary goal out of this hearing is to get the standards in place for business, for universities, for schools, whether they come from the CDC [or] OSHA they need to be out there so people can understand what's expected of them and if they do what's expected, they don't need to worry about getting sued. The big hole in the puzzle right now is the standard."

Graham, a key Trump ally in the Senate, did suggest he might press the White House on the issue.

"I'll pass this up the food chain of the administration that the sooner we can come with a regulatory, OSHA-driven process … the better off we will be," he said. "We need to give people notice of where the cliff is."

But Graham told colleagues that regulations alone won't be enough and that some sort of legislation looks necessary.

"The goal is to define limited liability protection in time and scope to deal with a COVID-related reopening of the county," he said. "We need to make sure bad actors are not given a break but that people who are trying to do it right can reopen their businesses … with assurance that if you practice the right procedures that you don't have to worry about getting sued on top of everything else."

View more articles

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.