White House, Congress clash over liability protections for businesses as firms weigh virus reopening plans

WASHINGTON - Congressional leaders are girding for a huge fight over the re-entry of millions of Americans to the workplace, with Senate Majority Leader Mitch McConnell, R-Ky., insisting that employers be shielded from liability if their workers contract the coronavirus. He appears to have the backing of top White House officials.

Democratic leaders have declared they will oppose such blanket protections, putting Washington's power brokers on opposite sides of a major issue that could have sweeping implications for health care and the economy in the coming months. The battle has unleashed a frenzy of lobbying, with major industry groups, technology firms, insurers, manufacturers, labor unions and plaintiffs lawyers all squaring off.

The clash is a sharp departure from the past six weeks, when lawmakers from both parties came together to swiftly approve nearly $3 trillion in emergency funds as Americans hunkered down during the pandemic. Now, lawmakers are warring over what the rules should be when millions of Americans return to the workplace.

With President Donald Trump increasingly focused on pushing businesses to reopen, the Republican-led Senate is preparing to reconvene on Monday. Key GOP senators are circulating drafts of legislation to set up legal protections they say would give businesses the confidence to reopen without worrying about lawsuits.

"It seems intuitive to me that if you're a marginal small business and you're making the decision whether to hang in there and try to survive, or whether you're just going to give up and either declare bankruptcy or just become insolvent, that this would around the margins, this could make the difference," said Sen. John Cornyn, R-Texas.

Cornyn is working on legislation that would shield businesses from liability over coronavirus-related claims as long as they comply with government guidelines.

The Democratic-run House remains largely shuttered for at least another week, with leaders citing the health risks. And Democratic leaders want to focus their next legislative effort at pumping more money into the economy, with House Speaker Nancy Pelosi, D-Calif., pointing to $1 trillion in needs for cities and states.

But for McConnell, one of the biggest concerns appears to be the threat of lawsuits against businesses. He has described the potential for a "second pandemic" of litigation, and he and House Minority Leader Kevin McCarthy, R-Calif., say discussion of liability protections will be "absolutely essential." Democratic leaders, however, have not expressed any interest in advancing such protections at a time when workers are risking their health by laboring at manufacturing jobs, grocery stores, hospitals and other businesses that have stayed open throughout the crisis.

"Providing some kind of blanket immunity shield is an idea that's the result of the majority leader's imaginary bogeyman of a flood of lawsuits, a parade of horribles that is a political ploy," Sen. Richard Blumenthal, D-Conn., said Friday. He said the proposal would be "a non-starter."

Lawmakers in both parties, along with Trump administration officials, agree that Congress must attempt to produce additional measures to address the pandemic, as the economy still reels after more than 30 million Americans filed unemployment claims in six weeks. But reaching consensus between the Senate, controlled by Republicans, and House, controlled by Democrats, could prove much harder than previous efforts.

In addition to the GOP demand for corporate liability protection, Democrats have demanded more assistance for cities and states, which McConnell says he won't agree to without liability protections included.

For now, public posturing has taken the place of any serious bipartisan negotiations.

It's not yet clear what types of legal liability proposals Republicans and the Trump administration might coalesce around. Cornyn and other Republicans are looking for ways to shield businesses and health providers from coronavirus-related claims while making exceptions for gross negligence, and they're also eyeing protections for makers of protective gear. In earlier coronavirus bills, Congress has already approved some protections for makers of protective masks and for volunteer health workers. Cornyn also suggested the possibility of establishing a federal fund that would pay out claims.

"We're pretty strongly exploring the breadth and depth of liability protection for businesses and the like as we go through reopening and sustaining opening through the pendency of coronavirus prior to the introduction of a vaccine," said a senior administration official, speaking on condition of anonymity to describe confidential deliberations.

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The debate over legal liability and tort reform has divided the parties for years, with Democrats accusing Republicans of doing the bidding of big business while Republicans contend that Democrats are in the pocket of trial lawyers. Powerful business lobbies like the Chamber of Commerce, the National Association of Manufacturers and the insurance industry are now lobbying heavily in support of liability shields for businesses, while trial lawyer associations, unions and groups representing plaintiffs and consumers are pressuring Democrats to oppose any such measures.

An April 29 letter to congressional leaders signed by scores of unions and advocacy and consumer groups including the AFL-CIO and the National Consumers League said they “strongly oppose any legislation that would establish nationwide immunity for businesses that operate in an unreasonably unsafe manner, causing returning workers and consumers to risk COVID-19 infection.”

Linda Lipsen, chief executive of the trial lawyers lobby American Association for Justice, alleged that Republicans and business groups are trying to use the pandemic to advance their long-standing agenda of limiting people's ability to sue when they are harmed.

"Sen. McConnell has been promoting immunity for companies that act unreasonably for over 30 years, and this is an extension of that," Lipsen said. "This move to hold this COVID package hostage with his agenda items is unpatriotic."

Multiple lawsuits have already been filed against businesses including Wal-Mart, nursing homes, insurers and others. More are on the way. Ads from plaintiffs attorneys are popping up on late-night TV seeking clients who've suffered damages in some way from the coronavirus outbreak.

A group called Top Class Actions that runs a website funded by attorneys is advertising multiple investigations related to the coronavirus, ranging from issues involving denied refunds for college courses, canceled flights, and faulty or lacking personal protective equipment, among other things.

Scott Hardy, the group's president, said they'd received more than 10,000 submissions in just the last month related to the coronavirus.

Hardy pointed to the example of meat packing facilities where workers have been required to stay on the job, in some cases, they say, without appropriate protective gear or in unsafe conditions. Some have fallen ill as a result.

"We can't be taking these rights away from all of these employees who are doing their best, these essential workers who are doing their best to help us," Hardy said.

Republicans and business groups dispute that they are trying to prevent workers or consumers from filing legitimate claims, or protect employers who have actually been negligent. Instead, business officials insist they are advancing limited sets of proposals aimed specifically at setting up reasonable protections for employers and health care workers in the context of the pandemic.

The National Association of Manufacturers, for instance, is asking Congress to limit lawsuits to instances where a manufacturer had actual knowledge that workers could be exposed to coronavirus and consciously disregarded that information or acted with reckless indifference. They're also seeking protections to ensure employers can collect and exchange critical information about employees' health status, and asking for liability shields for manufacturers that are producing protective gear like respirators or masks.

"If we are to get the country back to work and get our economy going again, employers have to have the confidence they can restart their operations or ramp their operations back up if they've been working all along," said Linda Kelly, general counsel at the National Association of Manufacturers.

The U.S. Chamber of Commerce is seeking some similar measures, including a “safe harbor” against customer lawsuits for businesses that have followed public health guidelines, and protections for health care workers and doctors on the front lines.

"We're not looking for permanent tort reforms here," said Neil Bradley, executive vice president at the U.S. Chamber. "We really do believe this should be focused on businesses and health care providers who are following, to the best of their ability, the public health guidance. They should not be subject to legal liability."

White House officials and allies have indicated support for such proposals, with National Economic Council Director Larry Kudlow telling CNBC recently that businesses should not have to deal with "trial lawyers putting on false lawsuits."

Stephen Moore, a conservative economist who is a member of the White House council to reopen the country, claimed credit in an interview for bringing the issue to the attention of the administration - although GOP aides and administration officials saying they've been hearing about the topic from businesses all over.

"Here's how I got the idea: I kept getting calls from employers, small business owners and people who run factories, who were saying, 'It's going to be really difficult even when we reopen to hire back workers if we have to worry about these lawsuits.' One of them said, 'Is there any way we can get an immunity clause from lawsuits?'" Moore recounted.

"And I thought, 'Wow, I'm sure a lot of businesses are feeling the same pressure and it turns out that was exactly right.' There are a lot of employers saying this," Moore said. "Then I sent it to White House economic team and said it has to be part of any economic recovery package."

The Washington Post’s Jeff Stein contributed to this report.