The Legal Drawbacks and Liabilities for Restaurants Under COVID-19

Tips from a South Carolina retail attorney on the harsh realities this pandemic presents

The world we live in has changed because of COVID-19, and how the law reacts to it is still unknown. So if you’re a restaurant or retailer still trying to operate in this new reality, Christian Stegmaier has a tip for you: err on the side of caution.

“It only costs someone $150 to file a lawsuit in South Carolina, and somebody will always take a case,” says Stegmaier, an attorney at Collins & Lacy in Columbia who advises retail and hospitality businesses such as hotel chains, department stores, and restaurant chains.

He has been fielding a lot of calls from clients in the last few weeks, and while there have been more questions than answers, here is an overview of the advice thus far.

Are There Any Exceptions to the Closure Rule?

“A lot of the conversations I’ve been having is from an 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 ordered 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.

If you’re continuing to operate, and want to know what your protocol should be, he adds: “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 it in the strictest sense.”

Is There Anything My Small Operation Can Do for Revenue?

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.”

The applications have been issued and, starting April 3, they will be accepting submissions. For more information about it, see the Small Business Administration page.

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’ Comp Claim from COVID-19?

While Stegmaier doesn’t handle employment claims, he knows clients are concerned about it.

“Ordinarily disease and viruses like this aren’t compensable under the workers’ compensation statutes. But will you have claims for coverage by people who have had to continue going to work—say, in grocery store settings and 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. If I’m a claimants’ lawyer, I could maybe make that argument. It might be hard to prove approximate 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? “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.”

For information on more legal questions regarding COVID-19, visit FindLaw’s legal center, or find more articles on superlawyers.com/articles (search for COVID-19). 

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