COVID-19 Limited Immunity Act: A Welcomed Degree of Certainty for North Carolina Businesses
As we continue to navigate the uncertain but improving times of the COVID-19 pandemic, potential legal exposure related to COVID-19 remains a particular concern for employers and business owners. For example, consider those people who are finally deciding to dine out indoors at a local restaurant:
- From the customer’s perspective, they may wonder what can be done if they contract the virus at the restaurant. Could a lawsuit be filed against the restaurant if the customer believes the restaurant did not act appropriately to protect its patrons?
- From the restaurant’s perspective, what happens if someone does file suit for allegedly failing to take appropriate steps to prevent transmission?
Many such suits have indeed been considered and filed over the past year-and-a-half, both in North Carolina and throughout the country. The North Carolina legislature, recognizing the severity of the situation and the need continue phased reopening of the State, acted rapidly and on an overwhelmingly bipartisan basis to clarify the law in this area.
Back on July 2, 2020, Governor Cooper signed 2019 NC H.B. 118 into law. This House Bill was entitled, “An Act to Provide Limited Immunity from Liability for Claims Based on Transmission of Coronavirus Disease 2019 (COVID-19).” The law is now codified in the North Carolina General Statutes at Sections 99E-70 through 99E-72 (hereinafter referred to as the “COVID-19 Limited Immunity Act” or the “Act”).
Who Is and Is Not Covered Under the Act
The COVID-19 Limited Immunity Act states that “no person shall be liable for any act or omission that does not amount to gross negligence, willful or wanton conduct, or intentional wrongdoing” provided that they provide “reasonable notice of actions taken . . . for the purpose of reducing the risk of transmission of COVID-19 to individuals present on the premises.” N.C. Gen. Stat. § 99E-71(a), (b). If such notice is provided, then “[n]o person shall be liable for the failure of any individual to comply with the rules, policies, or guidelines contained in the notice required by this subsection.” N.C. Gen. Stat. § 99E-71(b).
The “persons” covered by the Act are expressly identified as “[a]n individual; corporation; nonprofit corporation; business trust; estate; trust; partnership; limited liability company; sole proprietorship; association; joint venture; government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal entity.” N.C. Gen. Stat. § 99E-70.
The Act explicitly does not cover “premises owned by an individual, other than premises that are used [by said individual] in the operation of a sole proprietorship[,]” i.e., it does not apply to property that is not being used for business or government purposes. N.C. Gen. Stat. § 99E-71(b). Additionally, the Act expressly excludes “claims before the Industrial Commission seeking benefits payable under the Workers’ Compensation Act[.]” N.C. Gen. Stat. § 99E-71(c). Lastly, the Act “applies to claims arising no later than 180 days after expiration or rescission of Executive Order No. 116 issued March 10, 2020.” N.C. Gen. Stat. § 99E-72.
Best Practices for Employers and Business Owners to Comply with the Act
Accordingly, to take advantage of its protections, the COVID-19 Limited Immunity Act essentially requires employers to provide reasonable notice of any actions taken to reduce the risk of COVID-19 transmission to anyone present on the premises. The simplest way to comply with the Act is to place written notice in a visible location on the premises clearly stating what rules, policies, and/or guidelines have been enacted to prevent the transmission of COVID-19. This notice can include a requirement that all patrons or visitors must wear a mask, or that merchandise and furniture were re-arranged to ensure compliance with social distancing guidelines.
All covered persons that comply with this House Bill are immune from liability for certain types claims related to contraction of COVID-19 where other individuals (e.g., patrons, visitors, employees, and/or guests) fail to comply with the rules, policies, or guidelines contained in the aforementioned notice. In other words, compliant employers will be protected from liability, even where a customer or employee does not comply with the posted notice.
The most common type of claim that is addressed by the Act is a negligence claim alleging a failure to reasonably protect others from transmission of the virus. As mentioned above, prior to the Act, a patron of a restaurant could file a lawsuit against the restaurant for failing to take appropriate steps to protect its clientele from exposure to COVID-19. Thus, regardless of the actual merits of any such suit, the Act assuages a very common and real fear of employers in an effort to move forward with the phased reopening strategy for recovery from the effects of the pandemic.
Exceptions to Immunity
An important caveat – the COVID-19 Limited Immunity Act excludes protection from lawsuits alleging intentional or grossly negligent conduct. Grossly negligent conduct is not outright intentional – it is purposeful conduct that is so deeply careless that it might as well have been intentional. A business that purposefully violates State orders issued to limit the spread of the virus can still be exposed to liability despite the Act. Additionally, the Act only applies to claims arising on or after July 2, 2020, as well as to claims brought no later than 180 days (six months) after the expiration or rescission of the North Carolina Executive Order No. 116 declaring a State of Emergency, which remains in effect. After these stated periods, it is questionable whether there will any immunity for claims related to COVID-19 transmission. Likely, any such claims will need to be closely reviewed to see if any immunity applies.
Notably, a lawsuit filed to challenge a substantially similar legislation related to immunities for healthcare providers was recently dismissed by the Durham County Superior Court. The lawsuit, Howze v. Treyburn Rehabilitation Ctr., LLC et al. (Durham County, 20 CVS 2972), received national attention since it was the first of its kind to be filed. Approximately thirty other states had enacted similar statutory protections for healthcare workers, so those states were certainly keeping a close eye on the Howze case. The North Carolina legislation at issue in Howze states that health care providers and facilities “shall have immunity from any civil liability for any harm or damages alleged to have been sustained as a result of an act or omission in the course of arranging for or providing health care services.” N.C. Gen. Stat. § 90-21.133(a). The law’s stated purpose for healthcare worker immunity was “to promote the public health, safety, and welfare of all citizens by broadly protecting the health care facilities and health care providers in this State from liability that may result from treatment of individuals during the COVID-19 public health emergency. N.C. Gen. Stat. § 90-21.131.
The Howze case involved allegations of ordinary negligence against a nursing home facility and sought to challenge the statutory immunities granted to healthcare workers that are substantially similar to the provisions in the COVID-19 Limited Immunity Act. The Plaintiff in Howze argued that health care must be provided in “good faith,” therefore the immunity only can apply when good faith is proved in each instance. If successful, Plaintiff’s argument would have basically eliminated the statutory immunities because health care providers would need to go to court every time a claim is made to prove that the healthcare worker was acting in good faith. Typically, it is presumed that a health care provider is performing their duties in good faith, unless that presumption is rebutted by evidence to the contrary.
The presiding Superior Court Judge dismissed the case on February 12, 2021, for failure to state a claim upon which relief may be granted due to the statutory immunities that were explicitly provided to healthcare workers in that legislation. As such, at least for the time being, the protections outlined in that legislation have survived their first direct challenge, which bodes well for any similar challenges brought against the COVID-19 Limited Immunity Act. However, it remains to be seen whether this ruling will be successfully appealed, as well as whether any First Amendment or other Constitutional issues may arise in relation to these laws. In particular, likely potential issues on the horizon include private employers’ requiring customers and/or employees to wear masks and/or to be vaccinated.
In sum, the COVID-19 Limited Immunity Act provides employers and business owners with broad and meaningful protections, as well as a degree of confidence in the face of continued uncertainty surrounding the COVID-19 pandemic and as businesses continue to re-open. Those protections exist for the time being, but will likely continue to be challenged in court. Businesses and employers will benefit from careful review of the Act, as well as application of its provisions – especially as they continue to navigate reopening their doors and are met with customers and employees eager to regain some sense of normalcy.