As COVID-19 cases continue to peak in Arkansas and surrounding states pause or roll back reopenings, Gov. Asa Hutchinson removed a perceived impediment to economic recovery through a series of orders providing new legal protections from COVID-related claims. 

On June 15, the governor issued three executive orders that 

• provide civil immunity for businesses from COVID-related injuries or damages; 
• provide immunity to health care providers providing COVID-related treatment; and 
• expand workers’ compensation coverage to specifically cover injuries arising from workplace exposure to COVID. 

These orders are effective through the termination of Arkansas’ state of emergency. They do not apply to claims or lawsuits brought before June 15.

Business Immunity Order

Of the orders, EO 20-33 — the business immunity order — provides, arguably, the most significant legal protections. 

This grants civil (but not criminal) immunity for individuals, businesses and all other types of entities or organizations, along with their employees, agents and officers, from liability for damages or injuries resulting from exposure to COVID-19.  

While the scope of the immunity is straightforward, questions arise as to actions that could cause a business to lose these protections. The immunity does not apply to injuries resulting from “willful, reckless or intentional misconduct.” 

The business immunity order does not define what constitutes this misconduct, but it does create a legal presumption that a business did not engage in “willful, reckless or intentional misconduct” if 

1. the business has “substantially” complied with “health and safety directives or guidelines issued by the governor or secretary of the Department of Health” or 
2. it attempted in “good faith” to comply with the same. 

Because the order excludes directives issued by cities, counties and even the federal government — whether stricter or more lenient — it is important to maintain compliance with the directives issued by the state in order to ensure application of the presumption. 

With a potential conflict between actions taken by city governments, evidenced by different masking requirements, and separate guidelines from other governmental entities, confusion may result. For instance, will failure to comply with a city’s mask ordinance be fatal to immunity because it was permitted through an executive order issued by the governor? 

One state, Oklahoma, addressed this issue by granting immunity “if the conduct is consistent with any applicable guidance,” but no such clarification is in Arkansas’ immunity order. The substantial compliance requirement also leaves room for interpretation in the courts. Is it enough to implement most, but not all, of the directives or guidelines issued by applicable authorities?  

With these uncertainties, businesses would be well served to review a wide range of directives from federal, state and local authorities, including Occupational Safety and Health Administration and the Department of Labor, but ultimately ensure compliance with those issued by the governor and the state Department of Health and adopt written policies consistent with the same. Periodic review and enforcement of these policies could be proof of a “good faith” attempt to comply.

Workers’ Compensation Order

Although the business immunity order protects against civil claims, it does not supplant workers’ compensation benefits. 

EO 20-35 clarifies that COVID-19 is an “occupational disease” under workers’ compensation law. This opens the door for an employee to receive compensation if exposure at work leads to the disease, provided there is proof of a causal link between the disease and employment. 

The order also puts in place a roadblock to the removal of claims from workers’ compensation for certain intentional conduct related to COVID. It states that requiring an employee to perform work even if exposure to COVID-19 is “possible” or “likely” in the normal course and scope of his or her job duties does not constitute intentional conduct such that the protections of workman’s compensation law are denied.  

Health Care Immunity Order

Finally, the governor also signed EO 20-34, which protects health care providers from civil liability. 

This means health care providers and workers are immune from civil liability for death, injury or property damage resulting from treatment provided for COVID-19 or symptoms of COVID-19. It also does not apply to willful, reckless or intentional misconduct. 

Constitutional?

Questions have been raised by legal commentators concerning the governor’s authority to issue these executive orders and whether the granting of immunity provided by the orders violates the Arkansas Constitution. 

While it is uncertain whether the orders will stand up to legal scrutiny if challenged in the courts, businesses can insulate themselves from potential legal liability by making best efforts to adhere to state-issued COVID-19 guidelines.

Betsy Baker is a member of Rose Law Firm and handles a wide variety of civil disputes. Her focus and experience is concentrated in three main areas: Creditors’ rights, including collections and bankruptcy; commercial contract and tort disputes; and family law. 

David Mitchell Jr. is a member of Rose Law Firm and concentrates his practice in business, financial services and class action litigation. He also represents financial institutions and other creditors in both litigation and restructuring as well as insolvency matters.