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COVID-19: North Carolina Businesses May Soon Have Protection from COVID-19-Based Claims

Date: 6 July 2020
U.S. Corporate/M&A and Labor, Employment, and Workplace Safety Alert

The North Carolina General Assembly has ratified a bill that could lead to liability protections in North Carolina for businesses that develop COVID-19 mitigation plans. If Governor Roy Cooper signs the bill (or the General Assembly overrides his veto), businesses with mitigation plans will be shielded from certain claims based on COVID-19.

Both houses of the General Assembly passed House Bill 118 by an overwhelming majority, and the ratified bill was sent to Governor Roy Cooper’s desk for his signature or veto on June 24. Governor Cooper has not indicated whether he will sign the bill, but the votes in each house of the legislature were overwhelmingly in favor of the bill, so there may be a veto-proof majority of legislators on board.

What would the signing of H118 into law mean for North Carolina businesses? In short, businesses that create COVID-19 mitigation plans would be protected from claims that another person contracted COVID-19 based on the property owner or business owner’s negligent act.

This protection only applies to claims that arise within six months of the rescission or expiration of the Governor’s declaration of a state of emergency (Executive Order No. 116), and does not apply to Workers’ Compensation claims. It also does not apply to claims based on gross negligence, willful or wanton action, or intentional wrongdoing.

Note that a limited immunity already exists for certain North Carolina businesses pursuant to Senate Bill 704 / Session Law 2020-3. That law (section 4.14) protected businesses deemed “essential” from suits based on a customer or employee contracting COVID-19 while doing business or working on site, and protected emergency response entities from COVID-19-related suits from the people they serve. For more on the impact to the health care industry, see this alert discussing the impact of SL 2020-3 on that industry.

Business owners and operators may want to begin preparing written plans now, if they have not already, in order to take advantage of the new liability shield as soon as it goes into effect. K&L Gates LLP has created a HUB webpage to address the legal implications of the COVID-19 outbreak on businesses in North Carolina and across the globe. Contact the authors of this article or your K&L Gates attorney for assistance or to receive updates during the COVID-19 emergency.

This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer. Any views expressed herein are those of the author(s) and not necessarily those of the law firm's clients.

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