Small-business owners across California answered the call by remaining open during the Covid-19 pandemic to provide groceries, medicine, medical and hardware supplies, transportation and other essential services so Californians could have what they needed during the stay-at-home directive. Other businesses took the initiative and completely retooled their manufacturing or assembly processes to create masks, disinfectants and gowns so Californians had personal protection equipment and products to protect their health.
And what is the reward for all these good businesses that stood up? It's the potential threat of unwarranted lawsuits stemming from the Covid-19 pandemic. California is well known for its plaintiff-friendly court system, which puts businesses at greater risk of lawsuits. Some points to consider:
Plaintiff attorneys are already advertising to recruit individuals to "sue now" even if they have not contracted the disease.
Those heroic manufacturers who answered the call may soon face product-liability suits should their products have design flaws or contain insufficient product-liability warnings.
State agencies are drafting technical and other regulations to further enforce Covid-19 protections, which will most likely create an inadvertent avalanche of lawsuits created by loopholes in these regulations. This could be the case, for example, if new regulations move 6-foot social distancing in restaurants to 6 feet, 2 inches.
Many states, such as Arizona and New Jersey, along with five others, have limited the liability of health-care providers when providing medical care in support of the state's Covid-19 response. Small businesses need the same protection.
All business owners want to be and feel safe. Owners likewise want safety for their employees and customers. But they also want and appreciate certainty that a lawsuit, in this time of crisis, won't wipe them out. There are more than 3.9 million small businesses in California; 1.6 million are minority owned. Together, they employ 7 million California workers.
As a solution, some suggest Gov. Gavin Newsom issue an executive order—right now—to lawfully protect businesses during a pandemic. But that may not be enough. Worries abound that executive orders will be challenged by the plaintiffs' bar, potentially leaving businesses vulnerable. California, like other states, needs legislation as a backstop to executive orders to provide liability protection. Kentucky and New York already passed legislation to curb Covid-related liability.
That is why small business owners are urging Newsom to sponsor and sign legislation that serves as a legal backstop to an executive order. Such legislation would distinguish legitimate claims from no-injury lawsuits that allow customers and employees to sue businesses alleging that by merely being inside the business, they suffered harm because they could have potentially contracted Covid-19, even if they did not.
The owners strongly believe that the legislature must act and that the governor must sign bills to place reasonable constraints on the types of lawsuits that pose an obstacle to the coronavirus response effort, place businesses in jeopardy and further damage the economy.
It is clear that Newsom needs to protect small business owners, and California businesses across the state, from no-injury lawsuits. We are making a direct plea: Governor, break the cycle of lawsuit abuse and help us protect our businesses and jobs.
Aaron Hichman is president of the Oakland-based California Retail Hardware Owners Association, a community of independent hardware stores, home centers and lumber yards.