Senate Republicans Propose Bill to Shield Employers From COVID-19 Related Lawsuits

Topics: COVID-19

This week, Senate Republicans introduced a bill (S-4317) that would provide employers with protections from certain types of COVID-19 lawsuits that are already being filed and are expected to increase in the coming months.  Importantly, this would be a federal law that would primarily shield employers from lawsuits arising under federal laws, such as the Fair Labor Standards Act (FLSA), the federal WARN Act, and other federal laws.  It purports to provide some protections for employers from similar claims brought under state laws as well.  However, these protections are limited and may not survive the amendment process as the bill makes its way through Congress.  Because most California employment lawsuits allege state law claims (given that California state laws generally are more employee-friendly than federal laws), this bill ultimately may not provide much relief for California employers with respect to potential lawsuits by California employees.  (And there is less than zero chance the California legislature will pass any bill that helps employers).  However, the federal litigation shield law would still provide protections for multi-state employers with employees outside of California.

Here’s what the Republicans’ bill aims to do:

• Amend the federal WARN Act to exclude COVID-19 layoffs from the Act’s usual requirement that employees be given at least 60 days’ advance notice of certain layoff decisions;
• Shield employers from liability (notwithstanding any other provision of federal, state, or local law) related to conducting COVID-19 testing in the workplace unless a personal injury results from gross negligence or intentional misconduct in conducting the testing;
• Preclude claims that a person or entity is an employer or joint employer simply because that person or entity provides COVID-19 testing services, cleaning and disinfecting services, personal protective equipment or training, or other COVID-19 related policies, procedures, or training; and
• Shield employers from liability under the FLSA, WARN Act, OSHA, Title VII, ADA, GINA, and ADEA in lawsuits based on a change in working conditions related to COVID-19 and/or based on an employee’s actual, alleged, feared, or potential exposure to COVID-19, if the employer was operating in good faith and attempting to follow applicable guidance [this standard essentially acknowledges that federal, state, and local COVID-19 guidance often has conflicted and materially changed throughout the pandemic, often without adequate notice to businesses or to the public].
• The bill would not affect workers’ compensation coverage for COVID-19 claims.

In addition to the foregoing, the bill proposes a number of procedural protections and limitations on COVID-19 related lawsuits, including the following:

• The bill would allow all COVID-19 related lawsuits based on exposure to COVID-19 and/or medical liability to be filed in federal court, or removed by the defendant to federal court (a defendant could even remove actions that were filed in state court prior to the federal law taking effect);
• The bill would limit damages in a COVID-19 related lawsuit based on exposure to COVID-19 and/or medical liability as follows:  (1) compensatory damages could only be awarded for economic damages (e.g. wage loss) and not non-economic damages (e.g. emotional distress), unless the defendant’s misconduct was proven to be “willful,” in which case non-economic damages could be awarded; (2) punitive damages would only be available in cases of proven willful misconduct and the punitive damages award could not exceed the compensatory damages award; and (3) the defendant would be entitled to an offset for any payments provided to the plaintiff by insurance, the government, or other parties for the harm allegedly suffered;
• The bill would require that lawsuits alleging wrongful exposure to COVID-19 and/or medical liability to be verified under oath and to include an affidavit from a medical professional.  The lawsuits would also be subjected to heightened pleading standards requiring a higher level of detail and specificity than is normally required.  The bill would also require that any class action be an opt-in class action.  In other words, class members would have to affirmatively opt-in to be a member of the class.

In sum, the bill is a good start to providing some protection for employers against the anticipated onslaught of COVID-19 lawsuits by the plaintiffs’ bar.  However, the bill will face opposition from democrats and is almost certain to undergo significant change before being passed.