Michigan Lawmakers Propose Legislation that May Protect Your Business from Civil Liability Regarding COVID-19 Claims

Friday, September 11, 2020

As businesses begin to open back up, they must prepare themselves for an impending wave of civil lawsuits relating to COVID-19. For businesses that are financially recovering from layoffs and lockdowns, these lawsuits could have serious financial consequences. Michigan lawmakers have recently introduced a package of legislation aimed at providing businesses and employers with civil liability protection from COVID-19 related lawsuits, while also providing safety protocols for employees returning back to work (House Bills 6030, 6031, 6101, and 6032). The proposed legislation has faced opposition from other lawmakers and labor organizations, among others. Below is an overview of the liability protections if these bills are signed into law.

HB 6030

General COVID-19 Liability:

The “COVID-19 Response and Reopening Liability Assurance Act” would provide substantive requirements and standards for claims alleging COVID-19 exposure and product liability. The Act would apply retroactively to claims after January 1, 2020.

Under the Act, a person may not bring a lawsuit alleging a COVID-19 claim unless the claim alleged harm related to a minimum medical condition.

  • “COVID-19 claim” would mean any claim for damages, losses, indemnification, contribution, or other relief related to exposure or potential exposure to COVID-19 or a business’s actions intended to maintain workplace safety.
  • “Minimum medical condition” would mean (a) positive COVID-19 diagnosis or related symptoms that required hospitalization of 24 hours; (b) medical illness caused by COVID-19 that results in an individual’s inability to engage in usual and customary daily activities for 14 days; or (c) death.

This prohibition would not apply if the business’s conduct was deliberately intended to cause harm. 

A business would not be liable for a COVID-19 claim arising from an individual’s exposure to COVID-19 on its premises, unless the injuries were caused by a reckless disregard of a substantial and unnecessary risk that an individual would be exposed to COVID-19 or the business engaged in a deliberate act intended to cause harm.

Importantly, the Act provides a safe harbor for businesses that operate reasonably consistent with federal or state laws or public health guidance at the time of the alleged harm. Please contact our Firm if you have any compliance questions.  

Product Liability Claims:

Under the Act, businesses would be protected from product liability claims related to COVID-19 in the following scenarios:

  1. Businesses that design, manufacture, label, sell, deliver, distribute, provide insurance coverage for, or donate a qualified product used by an essential business, first responder, government entity, health facility, or health professional. 
    • “Qualified product” would mean: (a) PPE; (b) medical devices, equipment, and supplies used to treat COVID-19 or used outside of the product’s normal use to treat or prevent the spread of COVID-19; (c) Medications used to treat COVID-19; (d) COVID-19 tests.
  2. Businesses that design, manufacture, label, sell, deliver, distribute, provide insurance coverage for, or donate disinfecting or cleaning supplies or PPE that does not make such products in the ordinary course of business (e.g., auto suppliers manufacturing PPE).
  3. Businesses that select or dispense a qualified product in response to COVID-19.

Businesses would not be protected if they had actual knowledge that the product was defective and there was a substantial likelihood that the defect would cause injury and willfully disregarded that knowledge.

A business that uses its premises for quarantine, to provide health care services, or to provide shelter to patients, first responders, or health professionals would not be liable for causing the death of or injury to an individual, unless the business was grossly negligent.

HB 6031 and 6101

House Bills 6031 and 6101 would amend the Michigan Occupational Safety and Health Act to establish immunity for an employer whose employee is exposed to COVID-19. This immunity would apply retroactively to claims after January 1, 2020. An employer would not be liable for damages resulting from an employee’s exposure to COVID-19 if:

  • Employee was exposed to COVID-19 during the COVID-19 emergency (March 10, 2020 through present).
  • Employer was operating reasonably consistent with federal or state laws or public health guidance at the time of the exposure.

Civil immunity would not apply if the employer willfully exposed the employee to COVID-19.

HB 6032

HB 6032 would codify portions of Executive Order 2020-172. The new act would prohibit an employee who tests positive for COVID-19 or displays COVID-19 symptoms from returning to work until he or she receives a negative COVID-19 test result or until both conditions are met:

  • 3 days have passed since the employee’s symptoms have ended; and
  • 7 days have passed since the date the employee’s symptoms first appeared, or the date the employee received the test that yielded a positive COVID-19 result (whichever is later).

The act would also prohibit an employee who has had close contact with an individual who tests positive for COVID-19 or displays COVID-19 symptoms from returning to work until:

  • 14 days have passed since the employee had close contact with the individual; or
  • The individual tests negative for COVID-19.

Certain industries would be exempt from these prohibitions: (a) health care professionals and health care facility workers; (b) first responders; (c) child protective service employees; (d) child care workers; and (e) correctional facility workers.

Employers would be prohibited from taking adverse employment actions against an employee who complies with the prohibitions. Employers, however, could terminate or discipline an employee that is not prohibited from coming to work under the act, but does not come to work anyways.  

Collective bargaining agreements (CBA) that are inconsistent with the new act would control until the CBA expires or is amended, extended, or renewed.

This new act would be repealed effective March 31, 2021.

The proposed legislation would not affect the exclusive-remedy provision under the Worker’s Disability Compensation Act, which provides that workers’ compensation benefits is the “exclusive remedy” available to an employee against an employer for injuries arising out of and in the court of employment.

A number of other states have already passed laws that limit liability for claims by employees and others relating to COVID-19 exposure. Congress has also considered passing federal civil liability limits. Republican Senators proposed the Safe to Work Act (S.4317), which would provide immunities for businesses and would create procedural and substantive hurdles for plaintiffs alleging they became infected with COVID-19 due to commercial or organizational misconduct, specifically creating an exclusive federal cause of action for claims of personal injury arising from exposure to COVID-19.

Butzel Long will continue to monitor this proposed legislation and any other legislation that may affect your business related to COVID-19 civil liability protections. If you have any questions or compliance concerns, please feel free to contact us.

Steven R. Eatherly
248.983.6953
eatherly@butzel.com

Javon David
248.258.1415
davidj@butzel.com

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