The Legal Drawbacks and Liabilities for Restaurants Under COVID-19

A South Carolina retail attorney on the harsh realities of the COVID-19 era

By Trevor Kupfer | Reviewed by Canaan Suitt, J.D. | Last updated on January 29, 2024 Featuring practical insights from contributing attorney Christian Stegmaier

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One of the many ways the COVID-19 pandemic challenged the United States was in the realm of state law and policy. Christian Stegmaier, an attorney at Collins & Lacy law firm in Columbia, South Carolina, had a tip for food service and retail owners still trying to operate in the new reality of a public health crisis: Err on the side of caution to avoid COVID-19 liabilities.

“It only costs someone $150 to file a lawsuit in South Carolina, and somebody will always take a case,” says Stegmaier, who advises retail and hospitality businesses such as hotel chains, department stores, and restaurant chains. Stegmaier fielded a lot of calls from clients in the early days of the spread of COVID-19. While there was great uncertainty, here were Stegmaier’s insights on business interruptions and safety measures.

Were There Any Exemptions to the Closure Rule?

“A lot of the conversations I’ve been having is from a business operations standpoint: ‘What are we going to do? If there’s no revenue, are there any exceptions to the rules?’” Stegmaier says. “There aren’t. You’re either selling takeaway, or you’re closed.”

Gov. Henry McMaster issued an executive order for restaurants and bars to close their doors, and some have since tried to make a go of takeout and curbside service. “There are some that have made it work, but many small operators, I think, have given up and just closed down,” Stegmaier says.

For business owners who continued to operate, Stegmaier emphasized workplace safety and health: “Before each shift, when everybody comes on, you should at least be asking basic questions about the health of your employees to make sure you’re not doing anything where you’re knowingly exposing consumers to disease. And make sure all the protocols in terms of food handling and food safety are adhered to in the strictest sense.”

If you have anyone in your operation who is ill or showing symptoms, living in a house with someone who has been confirmed, and they work in your kitchen and you know these things, that is going to be a problem. A smart operator is doing some sort of screening ahead of every shift. Not necessarily taking people’s temperatures, but at least asking, ‘Are you OK? Is everyone in your household OK?’

Christian Stegmaier

What Could My Small Business Do for Revenue During Short-Term Disruptions?

While Stegmaier doesn’t typically represent retailers under a few hundred employees, he says, “If I did, I would advise them about the federal government aid and assistance. They put billions of dollars in play in the form of small business loans and grants that cover things like overhead, payroll, and insurance for up to two and a half months.”

If I Do Takeout/Delivery, Is There Liability with Customers?

“It seems apparent that the bigger operators are thinking about potential liability,” he says. “For instance, I’m seeing quite a few promoting noncontact transactions. You’re not touching a screen; you’re not touching credit cards; they’re not handing you anything; there’s no contact whatsoever.”

At the very least, you want to minimize negligence. “If you have anyone in your operation who is ill or showing symptoms, living in a house with someone who has been confirmed, and they work in your kitchen and you know these things, that is going to be a problem,” Stegmaier says. “A smart operator is doing some sort of screening ahead of every shift. Not necessarily taking people’s temperatures, but at least asking, ‘Are you OK? Is everyone in your household OK?’

“If someone gets sick from eating your food and spends two weeks in the hospital and they run up $65,000 in medical bills or, even worse, they die, and it becomes publicized that they ate food from a place that either knew or should have known someone who tested positive was working, I could very much see potential claims arise.”

Could an Employee File a Workers’ Compensation Claim for COVID-19?

While Stegmaier doesn’t handle employment issues, he knows clients are concerned about work-related injury claims.

“Ordinarily, diseases and viruses like this aren’t compensable under the workers’ compensation laws. But will you have claims for coverage by people who have had to continue going to work—say, in grocery store settings or restaurants that remain open for takeout—and can demonstrate that they got it while they were working? That’s potentially a question that will be up to the appellate courts in South Carolina,” he says.

“If I’m a plaintiff’s lawyer, I could maybe make that argument. It might be hard to prove proximate cause, but they might, and the courts are typically geared toward being claimant-friendly. We might see some litigation on that in the coming months and years.”

What Else Should We Be Worried About?

In short: more than you probably suspect.

“If you’re used to having a dining room and that’s closed down, you have only one job to do now: Make sure your orders are perfect when they go out. The folks that remain in the operation have the ability to be very focused on what they’re doing now, and that gives them the opportunity to be perfect. And the reality is they have to be perfect, not only from a business standpoint because that’s what people’s expectations are, but from a food safety standpoint. There’s really no room for error,” Stegmaier says.

As for what the future holds beyond the coronavirus health emergency? “This thing is changing from day to day. There are issues we haven’t even contemplated yet that might show up next week, and we’ll have to deal with it somehow.”

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