The Impact of Tort Reform Liability Shields During the Covid‑19 Pandemic: Hyper-Preemption in the States

This essay considers the impact of state–local preemption during the coronavirus pandemic (Pearson and Conway 2021). Preemption is when a higher level of government displaces the lawmaking capabilities of another when they come into conflict. In a federal system of government, issues of sovereignty and supremacy allow for the federal (or state) government to make blanket, preemption decisions that preclude state (or local) regulation if there is a dominant federal (or state) interest to do so.

Preemption has been used in positive and negative ways throughout US history. A positive example would be the passage of the Civil Rights Act of 1964, which preempted state and local governments from enforcing discriminatory laws against minorities. A recent negative example is illustrated by Republican governors in Texas, Florida, and Alabama preempting urban governments, in this case, the cities of Austin, Tampa, and Mobile, in their attempt to enforce (or re‑establish) mask mandates within municipal boundaries (Myers and Downey 2023; Schragger 2021). State-to-local preemption activity, sometimes referred to as “hyper-preemption,” has been steadily on the rise and hamstrings local government’s ability to adopt laws ensuring a range of policies of urban importance such as affordable housing (Goodman and Hatch 2023), suspending utility shutoffs (Andre et al. 2024), limiting inclusionary zoning ordinances (Melton-Fant 2020), and passing eviction moratoriums due to non-payment of rent (Scharff 2018; Schragger 2021; Schragger and Lankachandra 2020; Wagner et al. 2020).

This essay explores the “chilling” effect on lawsuits filed against employers during the coronavirus pandemic and illustrates the impact of tort liability shields. American jurisprudence’s litigious nature helps us understand how eliminating the threat of litigation to employers forcing workers back to work during a deadly pandemic might seem necessary in a polarized society. The essay concludes with a discussion of the ramifications of state governments’ “pre-” preemptive actions around policy or governance-related issues that have limited potential of becoming a problem.

During the Covid‑19 pandemic, at least twenty-eight states created new business tort liability shielding laws. A tort, in legal terms, is defined as a civil wrong. A tort occurs when a person or company knowingly violates someone’s legal rights. [1] An example of an employee’s rights violation could be an employer knowingly exposing workers or clients, or a worker’s fear of retaliation for attempting to take safety measures contrary to an employer’s stated policy.

These laws superseded local autonomy despite little threat of litigation or local ordinance activity around the issue (Hals 2022; Hemel and Rodriguez 2020; Marr 2021). By preempting tort liability, these states also provided an additional mechanism for business owners to force workers to return to work despite no proper protections for their health in the early days of the pandemic without fear of harm. Furthermore, statewide tort liability shields such as these potentially affect all businesses and their clients, regardless of size, within a state. Any such industry would be subject to the directives included in binding legislation or gubernatorial executive order. In the 28 states that passed such laws, most were governed by Republicans or by Republican-led legislatures. [2] This type of preemptive activity follows trends noted by scholars who explain these types of actions as a mechanism for managing and maintaining ideological cleavages in “blue” cities in red states throughout the US. [3]

A 2018 National League of Cities report explains the extent of the acceleration of state–local preemption. In 28 states, local governments are already preempted from raising the minimum wage above the state level; 23 states have preempted local paid leave laws, and three states (Tennessee, Arkansas, and North Carolina) have passed laws preempting local governments from passing anti-discrimination ordinances (National League of Cities 2017). Tort liability shields are a novel preemptive activity because there was little evidence that local communities were actively seeking to craft ordinances providing new avenues for employees to sue employers for forcing them back to work or for lack of PPE. Thus, this type of preemptive activity is doubly egregious.

Background

Congressional proposals to establish sweeping tort liability reform to shield large and small businesses from complaints from employees and others for coronavirus exposure began in earnest in mid-2020 (American Tort Reform Association 2020; Carney 2020). Fears of an onslaught of litigious activity led then-Senate majority leader Mitch McConnell and other members of Congress to insert tort liability shield clauses in several coronavirus relief bills. These shield clauses came after significant lobbying efforts by business organizations such as the US Chamber of Commerce and other tort reform advocates, such as the Texans for Lawsuit Reform, corporations such as International Paper, and the American Gaming Association (Texans for Lawsuit Reform 2020; Open Secrets (n.d.); Adamy 2020; Hals 2022; Robbie 2020). While the efforts at the federal level to establish a national preemption of such lawsuits were unsuccessful, more than 28 states enacted some legislation providing immunity for businesses in their states, superseding local decision-makers. [4]

These preemptive legal remedies raise concerns that illustrate the tension between protecting public health and economic viability. For example, one could imagine the problem a business owner (say, a nail technician) had during the pandemic to keep their doors open. Let us say that a few days after providing the service, they (the nail tech) tested positive for Covid‑19. Ideally, one would think that the nail salon is responsible for contacting clients to inform them about potential exposure. However, this duty of care might also raise the possibility of litigious action against the nail salon if the client tests positive and unknowingly passes the virus to others.

This example exemplifies the differences between ex‑ante (before an injury) and ex‑post (after an injury) incentive effects (Hemel and Rodriguez 2020). If the nail salon stays silent, they might avoid costly legal action against them, which is the opposite of what a public health perspective would require. These same impacts were seen throughout the pandemic with larger employers during the pandemic where corporations knowingly minimized the risks of virus transmission to their employees and their families, encouraging them instead to show up for work (BBC News 2020).

Effect of preemptive business liability policies during the Covid‑19 pandemic

There are other more significant impacts of these actions. First, these types of state laws impede the ability of employees and their families to seek relief if knowingly exposed to the virus. Second, these laws make it impossible for localities to pass local ordinances to protect the workforce (e.g. enforcing a local mask mandate). Finally, these laws set a precedent for new laws that might be considered in future pandemics. This preemptive state policymaking likely had grave outcomes for vulnerable populations, particularly African Americans, Latinos, hourly wage earners, and single-headed households in several industries (Kantamneni 2020; Mongey et al. 2020; Vavra 2020), although direct causation would be hard to prove in this case.

To explore the chilling effect these state laws had on complaints filed against employers during the pandemic, we turn to data collected by Hunton, Andrews, and Kurth LLP, a law firm specializing in litigation, government relations, and regulation. The firm collected Covid‑19-related complaints filed during the pandemic, including those related to tort liability. Table 1 shows the total number of complaints filed at the state level in the top 5 coded categories during which the firm collected and categorized them. Table 2 shows the total number of Labor and Employment claims filed in finer detail for all 50 states.

If litigation aims to resolve disputes, force the courts to clarify the laws of future conduct or contribute to collective self-government by signaling to the government what matters to individuals and society, this state–local preemption is puzzling. By foreclosing employee litigation options through implementing additional business tort liability shields, state governments decided that concerns about in-person workplace safety during the pandemic and local policy responses to them that might have helped mitigate exposure risks were not the purview of local communities and policymakers (Sentell 2004). This preemptive activity also negatively affected employee complaints filed in state courts.

Discussion and conclusions

The posture of national and state lawmakers signaling increased litigation during the pandemic was dubious at best. Only two such lawsuits were filed when then-Senate majority leader McConnell began discussing the coming wave. This pattern of preemption should raise concerns due to the potential impact of such policymaking activity in future pandemics.

While Congressional dysfunction likely stymied the ability of Congressional Republicans to pass a coronavirus package with this addendum, the lobbying power of business groups did impact state policy activity in this area. However, at least in this case, the need for additional tort liability shields was proven unfounded. The existing laws around such complaints require customer and employee plaintiffs to establish both causation (i.e. that business owners willingly sought to cause harm) and a breach of duty by the business. The concerns regarding frivolous lawsuits or mass bankruptcy of companies and corporations were unfounded based on the data presented here. Indeed, during initial congressional discussions, many legal commentators believed that the existing framework of tort liability was sufficient, and that state action was unnecessary (Dowdell 2020; Marr 2021; Terry 2022).

This essay illustrates the tensions that emerge when privileging corporate liability above public health and the need for caution when operating with limited data during a pandemic or other crisis. The prospect of economic decline due to litigation was opportunistic and put many workers at risk. We now know that many front-line workers (in hospitals, elder care facilities, and the like) were explicitly impacted by such laws (American Medical Association 2020; Lin et al. 2022). Furthermore, it illustrates the potential ways lobbying power can, without evidence, advance a preemption agenda that overrides local community efforts to protect their populations Finally, this essay speaks to the potential negative impacts on local governments subjected to preemptive actions by other levels of government, effectively prohibiting policy development around this issue.

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