At the beginning of the store closures in most states due to COVID-19, small businesses had to lay off some of their employees to help keep their company afloat. Now, as states are easing the stay-at-home orders and brick-and-mortar stores are slowly starting to open their doors, following government sanitary orders aren’t the only thing indie retailers should be worried about.
Be Prepared for A Potential Lawsuit
One of the many challenges retailers may face as they open their doors are lawsuits from employees. “Retailers, like other business owners, face their greatest exposure from employees who might claim unsafe working conditions,” Thomas Fazio, Partner at Blodnick Fazio & Clark, said.
“This can occur in two ways. First, an employee who doesn’t feel safe returning to work once a retail location reopens may decide to pursue litigation to replace their lost income from not working. Second, an employee who DOES return to work may not feel the employer has done enough to keep them safe.”
Small Businesses Need Protection
In March, New York State Governor Andrew Cuomo enacted an executive order that protected hospitals and doctors from lawsuits as they continue to treat patients with the coronavirus, according to a release sent to Independent Retailer. As part of the order, plaintiffs must prove incidents of either gross negligence or an egregious deviation from the standard of care. Now, 19 business groups have signed a letter with the Lawsuit Reform Alliance of New York asking the governor to protect them from any legal action that they may face as a result of the pandemic.
Fazio says Governor Cuomo should afford all businesses in the state the same protections that hospitals and doctors received against frivolous lawsuits during the coronavirus pandemic. He also says there are federal and state lawsuits being filed elsewhere and legal action can destroy small businesses that have already seen a loss of income during the lockdown.
Some of the groups who have signed the letter include the Real Estate Board of New York, the New York City Hospitality Alliance, and the Partnership for New York City. Of these 19 organizations, five of them are part of the governor’s New York Forward Advisory Board, which provides guidance on reopening the state.
Lawsuits Know No Borders
“I think it is likely the governor will convince the legislature to enact some protections for business owners in general, including retailers,” Fazio said. “Particularly a business that needs to be open to the general public, like retail, restaurants, etc., face tremendous exposure without some legal protections. Commonsense precautions will likely be required at any event, but, coming on the heels of the shutdown, litigation can force owners out of business altogether.”
It’s not just New York where businesses need protection, but really every state should have something enforced to keep businesses safe from frivolous lawsuits. Coronavirus doesn’t respect any state lines or national borders, and Fazio says business owners nationally can face the risk of litigation from both employees and customers.
How to Protect Your Business
The Center for Disease Control as well as each state have their own recommended guidelines to follow in order to keep everyone safe and reduce the risk of infections. Fazio says retailers should follow these guidelines as much as possible and follow the leads of stores that are open right now, such as grocery stores and pharmacies.
“All employees are issued masks and gloves and required to wear them. Customers are required to wear masks to enter. There is a limit to how many customers can be inside at any one time. Floor markings encourage people to stay six feet apart and to travel in one direction to avoid people passing by each other to the greatest extent possible. I think the best protection a retailer can have is to set safe policies and insist on enforcing them. If you can show you had such policies and did everything you reasonably could do to enforce them, you are likely not to have been negligent,” Fazio said.
According to Liz Cichowski, a learning & development professional with over 20 years of experience, specializing in the retail industry, retailers shouldn’t base their procedures off of their own opinions. Always refer back to what authorities say, and make sure the procedures are written down in a visible place for both employees and customers to see and acknowledge.
“Waiver agreements are terrible PR for companies. Companies should be showing how they are keeping their workers safe, not how they are trying to avoid liability if their workers get sick,” Aaron Goldstein, a labor and employment partner at the international law firm Dorsey & Whitney, said.
“Waiver agreements between employers and employees are also generally unenforceable except under very specific circumstances. Employees generally cannot waive workers compensation, which is the primary vehicle for addressing workplace injuries, such as a claim that an employee contracted a disease because of work. Some states, including California, have adopted a presumption that employees who catch COVID-19 caught it at work and are therefore covered by workers’ compensation. Employees also cannot waive their right to raise certain administrative charges, such as EEOC charges and OSHA complaints. Employees also cannot prospectively waive claims for intentional or fraudulent acts by their employers,” Goldstein says.