New Wisconsin law protects businesses from COVID-19 exposure liability

After months of relatively little legislative activity related to the COVID-19 pandemic, the Wisconsin state legislature passed legislation providing immunity to businesses and addressing Wisconsin’s unemployment insurance program. Effective on March 1, 2021 Wisconsin Act 4 makes businesses in Wisconsin, including schools and nonprofit organizations, immune from civil liability arising out of COVID-19 exposure in the workplace.

Specifically, the immunity protects business entities from the following: injury or death to any individual or damages suffered by any individual caused by an act or omission, in the course of or through the performance or provision of the entity’s functions or services, resulting in or relating to exposure to COVID-19.

An “entity,” for the purposes of application of this immunity, includes any employer covered under Chapter 108 of the Wisconsin Statues (Wisconsin’s unemployment insurance law), a partnership, corporation, association, governmental entity, tribal government, trial entity, or other legal entity, including a school, institution of higher education, or nonprofit organization. The immunity extends to the business owner as well as the entity’s employees, agents, independent contractors, and unpaid volunteers.

In addition to the broad immunity the new law affords, it extends retroactively all the way back to March 1, 2020, around the time the COVID-19 pandemic arrived in the area. The retroactive nature of this law applies to all claims which arose on or after March 1, 2020; in other words, if the exposure to COVID-19 happened on or after March 1, 2020, the employer is sheltered from liability for any injury, death, or damages arising out of such exposure. The law does not provide for any thresholds or parameters that would make it inapplicable to entities or employers of certain sizes.

The immunity does have some limits, however, as is often the case with statutorily granted immunity. If the entity’s actions or omissions involved reckless or wanton conduct or intentional misconduct, the immunity is lost. While there are some nuances in tort law that cause the splitting of hairs where acts or omissions forming the basis for liability is concerned, this essentially means that no action can be sustained for an employer’s negligence which resulted in exposure to COVID-19.

What constitutes reckless or wanton conduct? The law does not specifically define these terms. Decades of case law fleshing out these terms in various disciplines offer some guidance that will assist Wisconsin courts in determining what constitutes reckless or wanton conduct and intentional misconduct in the context of COVID-19. One possible implication is that, where there is an order or other directive in place, for example, from a public health agency, requiring a business to have certain practices in place, the business’s failure to comply with such directive could be seen as reckless or wanton conduct, thus removing the cloak of immunity.

Here in Dane County, there has been one order or another from Public Health Madison & Dane County in place since June requiring businesses to have certain measures in place, including the following:

• Place Public Health Madison & Dane County’s “Workplace Requirements for Employers and Workers” in a prominent location where all employees may access and view it.
• Limit capacity to 50% of approved capacity levels.
• Establish lines outside to regulate entry, with markings indicating where customers should stand to remain 6 feet apart from one another while waiting to enter.
• Have (and implement) a written hygiene policy and procedure that includes:
  • Ensuring employees who have a fever or other symptoms of COVID-19 will not be allowed to work;
  • Hand washing expectations and supplies available for staff; and
  • A description of proper cough and sneeze etiquette.
• Have (and implement) a written cleaning policy and procedure that includes:
  • Cleaning and disinfecting frequently touched surfaces multiple times a day;
  • Frequently wiping down any shared equipment, such as workspaces, credit card machines, lunchroom items, carts, baskets, etc.;
  • Cleaning common areas and equipment between use or shift changes; and
  • Protocols to clean and disinfect in the event of a positive COVID-19 case.
• Have (and implement) a written protective measure policy and procedure that includes:
  • Ensuring people are at least 6 feet from others whenever possible; and
  • Ensuring employees are provided with and wear face coverings when unable to maintain at least 6 feet of distance from people (if a transparent partition is in place, a face covering is recommended but not required).
• Document that the written policies and procedures were provided to employees or that they were trained on them.

There are also some additional industry-specific requirements under Dane County’s orders, as well as other COVID-related directives applicable to businesses at the local and federal levels that, if not followed, could eliminate immunity for businesses. For more details on those requirements, see previous articles from Kramer, Elkins & Watt LLC’s blog, including Forward Dane Phase 2 and Businesses Need to Know: COVID-Related Requirements.

In addition to the immunity, Act 4 makes a few changes to the way unemployment insurance (UI) claims are handled in Wisconsin, including extending some earlier temporary changes out to July 2021, to comport with federal programs providing additional unemployment relief. A brand new provision requires the Department of Workforce Development (DWD), in processing claims for unemployment benefits in Wisconsin, to presume that an initial claim for benefit years beginning on or after March 15, 2020, through March 13, 2021, relates to the COVID-19 related public health emergency declared on March 12, 2020, unless the claimant’s most recent separation from employment is due to a labor dispute, voluntary termination of work, discharge for misconduct, or discharge for substantial fault.

The presumption that has been written into the UI statutes will ostensibly help relieve and eventually eliminate the administrative backlog that was created by the DWD having to evaluate every claim for UI benefits and determine whether it was pandemic related or not. To further streamline the processing of these claims, employers no longer need to submit a request for relief from having their accounts charged for benefits paid to such claimants. Time will tell how quickly these changes work to unclog the UI claim pipeline.

As legislative activity continues at the federal and state levels, and agency orders continue to be issued at the local level, employers should continue to be diligent in staying apprised of developments surrounding the COVID-19 pandemic and their related obligations.

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