For as eager as restaurants may be to reopen or increase their capacities, phasing back into business as usual comes with a whole host of concerns. From legal action like lawsuits to less tangible—but no less damaging—reputation fallout, the potential of such negative consequences should give all operators pause. They’re not a deterrent per se, but rather a warning sign of what could pass, especially when reopenings are rushed with little forethought.
“When a restaurant owner/operator is given the green light to reopen, they are faced with a critical choice,” says Crystal Jacobs, vice president and program director of Restaurant Guard Insurance. “They can choose to go ahead and reopen or continue to stay closed. By choosing to open their doors to a COVID-19 world, restaurant owner/operators risk facing a laundry list of new liability and employment practices claims, along with significant harm to their reputation.”
The risk-reward dynamic is especially high for full-service restaurants, which have the most to gain in welcoming guests back into their dining rooms. But they also have the most to lose should something go awry. According to the Center for Disease Control & Prevention (CDC), foodservice limited to drive-thru, delivery, takeout, and curbside poses the lowest risk while on-site dining with no capacity reduction or special spacing poses the greatest. Whether by legal restriction or intrinsic safety concerns, the majority of full-service establishments have yet
As a division of U.S. Risk Insurance Group, Restaurant Guard insurance provides industry-specific solutions for everything from foodborne illness to staff liability and cybersecurity. The coronavirus is unlike anything foodservice has faced in the past and to that end, the company has broken down the reopening risks, from legal liability to reputational damage.
Safety concerns
The most obvious risk of reopenings is someone contracting COVID-19 at a restaurant. With other ailments like norovirus, salmonella, and even hepatitis-A, when patrons or staff fall ill, restaurants are required to notify the public and in some cases temporarily shut down to pinpoint the source of the illness and address it.
For the coronavirus, it’s a similar situation but with compounded urgency. Over the past week alone, a number of Houston restaurants shut down again after employees tested positive, at a time when cases are surging across Texas. Still, such occurrences aren’t unique to the Lone Star state as similar shutdowns crop up around the country.
Although afflicted staff could claim workplace injury, the result of any legal action would vary widely depending on the state. In California, worker’s compensation applies to anyone who tests positive and who does not work exclusively from home. In Texas, however, businesses have the option to opt out of worker’s compensation, although such a move sets them up for greater liability under tort law.
Because tracing the point of infection back to a specific restaurant would be near impossible, it’s tempting to assume that operators would be protected. But, as Jacobs pointed out, the lack of ironclad proof does not keep lawsuits from coming in; though restaurants may not be held accountable in court, the process could be costly.
“With restaurants, and really any industry, fraudulent claims are still claims,” Jacobs says. “You still must do something with them. You can’t just ignore them, because then you may have a default judgement.” Such rulings occur when one party fails to perform a court-ordered action and can, as a result, skew unfavorably for the absent party.
Employee considerations
Restaurants must be cautious not just in their safety and sanitation practices but also in how and who they bring back onto staff. In light of escalating tension and frustration around systemic racism, operators who bring back a majority or entirely white staff might find themselves facing legal action even if their intentions and reasoning were not racially motivated. In addition, pre-COVID workplace conflicts could also precipitate allegations of bias or retaliation. For example, if an employee had complained of sexual harassment prior to the pandemic and was not among the team members brought back to work, he or she could perceive that decision as retaliatory in nature.
Tarnished reputation
For as negative and immediate an impact that coronavirus-related shutdowns and legal action can have, reputational damage could prove worse with hard-to-quantify consequences that linger. Restaurants are already walking a tightrope in their decision to or to not reopen given the divide between those who think the public and private sectors aren’t taking the pandemic seriously enough and those who find the regulations too extreme.
Should an operator be forced to shutter its doors once again—this time due to a confirmed case of COVID-19 rather than a government mandate—the backlash could be severe.
“If an owner-operator decides to open up and an employee subsequently tests positive, the media coverage will not be far behind,” Jacobs says. “Then that whole group of Americans that didn’t think they should open up in the first place now have a bad taste in their mouths regarding that restaurant. In their minds, that restaurant made a poor decision that wasn’t in the best interest of their customers.”
It’s a similar situation for claims of discrimination or retaliation in bringing employees back to work. The restaurants may be exonerated in a legal sense, but it can be harder to sway the court of public opinion.
Proceed with caution
As with any endeavor, there’s no guarantee of success and no surefire way to avoid conflict, legal or otherwise. Nevertheless, Jacobs offers some tips on how restaurants can mitigate risks to their business while better protecting their employees and customers.
Carefully considering which employees to bring back first and being cognizant of the group as a whole can help operators reopen with a strong and hopefully diverse team. Clearly communicating the reasons for rehiring those individuals—seniority, tenure, skill set, etc.—to the rest of the staff can go a long way in avoiding wounded feelings, conflict, and legal action.
To keep employees and guests safe, Jacobs recommends taking special care in quotidien duties and sanitation practices.
“There are absolutely some things that owner-operators can do to lower their risk. Temperature screenings, enhanced sanitization practices, extensive testing if they have access to it, only seating customers outside and disposable or virtual menus are all practices to consider,” Jacobs said. “At the end of the day, restaurants reopening carries significant legal risks, and it’s the responsibility of owner-operators to assess them and determine a plan of action.”
