Client Alert: North Carolina’s Civil Immunity Legislation May Protect Some Businesses from Defending COVID-19 Contraction Lawsuits

Across the state and across the country, the questions of “how” and “when” to reopen your business have prompted the following additional question: What liability could the business face upon re-opening if a customer or employee contracts COVID-19 at our place of business?

This question quickly took the stage at the national level and several Washington lawmakers pushed for subsequent rounds of federal aid packages to include provisions that would provide – for a limited time period – some immunity to businesses and employers from civil liability for COVID-19 contraction cases (and possibly other types of claims).

While that debate stagnated in Washington, North Carolina joined a wave of states enacting legislation providing helpful liability limitations for certain businesses that might face claims from employees and customers claiming they contracted COVID-19 at the business. A key aim of this legislation is to aid businesses in reopening and to help them survive reopening without being brought down by a COVID lawsuit.

North Carolina’s new law (Session Law 2020-3) provides that “essential businesses” (as defined in Gov. Roy Cooper’s emergency orders) are temporarily immune from civil liability to customers and employees for COVID-19 contraction claims so long as the business was not grossly negligent, reckless or did not intentionally cause harm. While this law does not provide for absolute immunity, it can work as an effective shield to liability for businesses should a contraction lawsuit arise. The following key takeaways will establish a baseline understanding for all readers wondering about the legal impact of this legislation:

1. Heightened burden of proof: The legislation does not prevent a plaintiff from filing suit, but it raises the standard a plaintiff must meet in court to successfully establish liability on the part of the business for the plaintiff’s contraction of COVID. Plaintiffs have a higher liability hurdle because the legislation states “essential businesses” will only be liable for gross negligence and reckless or intentional conduct, not mere negligence. The heightened burden of proof imposed by the legislation will likely decrease the appetite of personal injury lawyers to take on these suits in the first instance, thereby decreasing the number of COVID contraction suits faced by businesses in North Carolina courts.
2. Applies only to “essential businesses”: This legislation is tied to Governor Roy Cooper’s Executive Orders 121 and 141 which identify essential businesses. Thus, the legislation applies only to a subset of businesses and employers in North Carolina. If you are not sure if your business qualifies as an “essential business”, please consult with your Manning Fulton relationship attorney. The legislation also applies to “emergency response entities.”
3. Applies only for COVID contraction claims seeking damages: The legislation limits civil liability only as described in paragraph 1 above. It does not preclude an employee’s remedies under the North Carolina Workers’ Compensation Act and it does not prevent government or criminal actions. Additionally, it only applies to COVID contraction claims, not other types of claims.
4. This civil liability limitation is only temporary: The liability protection is retroactive to March 27, 2020 when the Governor’s Emergency Declaration became effective and remains in place until the Emergency Declaration expires or is rescinded. Thus, it only covers acts or omissions during a limited time period. At some unknown date in the future, the declaration will expire or be rescinded, and most likely once the state reaches a full re-opening of the economy.

Our litigation team at Manning Fulton stands ready to assist with any dispute your business may encounter in the coming weeks and months ahead. Please reach out to Jessica Vickers or your Manning Fulton relationship attorney should a litigation need arise, or to help plan a strategy for re-opening that will put your business in a favorable position if found defending against a COVID contraction lawsuit in the future.