What Is The Reasonable Standard Of Care For Businesses At The Peak Of COVID-19

What Is The Reasonable Standard Of Care For Businesses At The Peak Of COVID-19
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What Is The Reasonable Standard Of Care For Businesses At The Peak Of COVID-19

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As the United States has just experienced its worst week yet for COVID-19 cases, deaths, and hospitalizations, there is a fear that in these extraordinary times, businesses may be faced with increased liability exposure due to the COVID-19 virus.

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Reasonable Standard Of Care For The Resurgence of the Coronavirus

This strong resurgence of the virus over the past months has profoundly impacted so many workers and businesses. It has also been accompanied by political fears about a potentially massive number of lawsuits against businesses and resulting political maneuvring for some sort of blanket immunity from being sued for COVID-related illnesses.

With predictions of a “tidal wave” of COVID-related workplace lawsuits on the way, fear of potential litigation is sensitizing businesses to need of taking reasonable precautions to ensure that employees are kept safe in the workplace. Fundamentally, what is expected of businesses during this current peak of the virus is not remarkably different from what is ever expected of businesses. They are expected to exercise what the law calls reasonable care.

Reasonable care has always been situation-dependent and that hasn't changed at all since the virus arrived in the United States almost ten months ago. What constitutes reasonable care in operating a business differs based upon the surrounding situation. So operating a business with reasonable care during "normal" times is different from operating a business where your town is close to a wildfire, there is reason to fear an imminent terrorist attack, or you are at the peak of a global pandemic that has killed close to twenty million people.

Any business that acts carefully about the health and safety of its customers and employees is acting reasonably.  A business should be legally liable when someone is injured because the business failed to act reasonably.  An example of this would be a business that allows an employee to have close contact with the public despite knowing that the employee should be in quarantine because the employee's spouse was just diagnosed with COVID 19.  Granting blanket immunity to businesses for this type of conduct would hurt the public, reward the guilty, and be counterproductive to public health.

At its core, the standard of care for businesses today in the United States and around the world is to run your business guided by common sense. 

Following Health And Safety Regulations

Practically, this means that business owners need to very closely follow all of the latest health and safety regulations and whenever they identify what might be a grey area in the regulations, err on the side of being more rather than less safe.

Businesses need to follow the best practices of other businesses in their area. This is the perfect time for more collaboration among businesses to share cost-effective best practices that help keep their employees safe.

And it is remarkably important for businesses to ensure that their employees and the public who frequent their businesses wear masks and follow all of the social distancing guidelines without exception.

Business exposure for liability today is more of a stick and a carrot than it perhaps ever has been. The stick part of the equation remains the same. Bad actors will be punished when there is causation between their failure to exercise reasonable care and injuries sustained by their workers.

Fear Of Excessive Civil Litigation Against Businesses

But while the government has feared excessive civil litigation against businesses, there is a strong motivation among many businesses to create a safer workplace in order to attract and retain the best employees. This is going to be a critically important part of the recovery as many businesses that have scaled down yet survived will prepare to scale back up.

Those businesses that have made the effort and been the most transparent about ensuring as safe a workplace as possible during the virus could benefit from the reputational goodwill in their communities. Especially in an era where both the foibles and achievements of businesses are amplified on social media, following the legal standard of care in difficult times is not only a requirement it's socially expedient.

None of this has changed under COVID-19. Businesses that were carelessly run before the virus are almost certainly being carelessly run today. The same is hopefully true of businesses that have always embraced as part of their mission providing safe conditions for their workers. While the details and dictates of what constitutes reasonable care shift depending upon the situation, the core concept always remains the same.

About Team Law

At Team Law, we became lawyers because we wanted to help people. Our clients are real people — not corporations. We work with individuals and their families and decided a long time ago that we did not want to use our skills to help some large, faceless organization more interested in profits than people.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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