Can Employers be Liable for Vaccine Side Effects — Or for Not Requiring Vaccination?

Whether employers are required to enact a mandatory vaccination policy for COVID-19 or choose to do so, some employees will seek exceptions to the rule. In fact, absence management professionals are reporting record numbers of accommodation requests for COVID-19. In this environment, employers question whether they can be held liable for vaccine side effects if they mandate the vaccine, while lawsuits have also been filed against employers for failing to protect employees and their family members from the virus.

So how do employers protect themselves and ensure employee safety?

To set the stage, the Occupational Safety and Health Administration (OHSA) issued an emergency temporary standard (ETS) on Nov. 5, 2021, requiring large employers (those with more than 100 employees) to mandate the vaccine in most cases.¹ It specified that these private (and some public) employers must require employees to be fully vaccinated or wear face coverings and undergo weekly testing if unvaccinated. On Jan. 13, 2022, the U.S. Supreme Court granted emergency relief by staying the implementation and enforcement of the ETS. As of Jan. 26, OSHA withdrew the ETS but did not withdraw it as a proposed rule, indicating that it is prioritizing resources to finalize a permanent COVID-19 healthcare standard.

Meanwhile, some states have enacted prohibitions against employers requiring employee vaccines, including Arizona, Florida, Kansas, Montana, New Hampshire, Tennessee, and Texas. If ultimately upheld, the ETS will preempt these bans and invalidate any state or local requirements that limit an employer’s authority to require vaccination, face covering, or testing.

Liability Risks for Mandatory Vaccination Programs

While the likelihood of a serious adverse effect from the COVID-19 vaccine is low,² some employers are concerned that they could be subject to liability in rare instances. Workers’ compensation laws may provide recourse if an employee is injured in the course of employment. Seeking recovery for a vaccine injury for a mandatory vaccine isn’t novel, and employees have previously brought successful workers’ compensation claims in such cases.³

On May 21, 2021, OSHA published a frequently asked question (FAQ) document clarifying that employers do not need to record adverse reactions from COVID-19 vaccines through at least May 2022.⁴ Previously, OSHA had stated that adverse reactions to required vaccines had to be recorded, while it was optional to record adverse reactions to recommended vaccines. Whether a vaccine reaction should be recorded with OSHA or not does not necessarily dictate if employees have a claim under their state workers’ compensation program. Whether a vaccine reaction is a compensable injury or illness will depend on state law and can be affected by details of an applicable workers’ compensation insurance contract.

Voluntary Vaccination Programs

In contrast to mandatory vaccines, if an employer leaves the vaccination decision entirely up to employees, those employees are unlikely to have claims under workers’ compensation laws for adverse vaccine reactions. State laws may vary on this, however, and employers should investigate the laws in their jurisdictions. It is common for workers’ compensation coverage to exclude injuries from uncompensated and voluntary participation in workplace health programs.⁵

However, there is a gray area between mandatory and voluntary. And when an employer does not mandate a vaccine but heavily incentivizes it or penalizes employees who don’t participate, there can be a presumption that the program is de facto mandatory.

On-Site Vaccination Clinics

When an employer establishes an on-site vaccination clinic, the analysis will again look at whether an employee is required and paid to participate. An employer should be clear in its communications and policies about whether participation is mandatory and compensated. Healthcare providers and employers may qualify for additional protection with immunity established under the Public Readiness and Emergency Preparedness Act, but employers should consult with their counsel to discuss whether immunity would apply.

While there is a possibility that an employer could be at risk for a workers’ compensation benefits claim due to a vaccine reaction, the good news for employers is that liability appears likely to be minimal and contained. Workers’ compensation programs serve to limit an employer’s exposure and, given the safety record of the vaccines thus far, claim volume appears to be low with minimal impact.

Opting Not to Require Vaccinations

Employers that do not mandate vaccines should also consider their risk exposure. OSHA and the Centers for Disease Control and Prevention (CDC) provide guidance for safe working environments, including policies and procedures for vaccinations, face coverings, social distancing, ventilation, and personal hygiene.

Employees have already filed lawsuits alleging that employers have failed to provide a safe working environment by not implementing proper COVID-19 policies, such as sanitation, social distancing, and screening.⁶ It is possible that employers could face similar lawsuits by employees who contract COVID-19 due to an employer’s choice not to enact a vaccine mandate. While most lawsuits for work-related illness would be covered — and therefore limited by — the workers’ compensation system, a recent California lawsuit has raised concern that employers could face more open-ended liability. In this case, a lawsuit against an employer was allowed to proceed on behalf of a family member who died as a result of COVID-19 spread from an employee who was exposed at work.⁷

With the widespread contagion of COVID-19, employees may face an uphill battle in these types of lawsuits against employers. Many will have difficulty proving that the source of the illness was the workplace. Additionally, many states have further reduced this risk for employers by enacting laws to shield them from liability. For example:

• Florida Senate Bill 72⁸ provides liability protections to businesses against COVID-19-related injury and death lawsuits. The law provides that a business entity that makes a good faith effort to substantially comply with authoritative or controlling government-issued health standards or guidance is immune from civil liability.
• Michigan House Bill 6030⁹ provides that a person, including a corporation or any other legal entity, who acts in compliance with all federal, state, and local statutes, rules, regulations, executive orders, and agency orders related to COVID-19 is immune from liability for a COVID-19 claim.
• Texas Senate Bill 6¹⁰ provides that a business cannot be held liable for exposing an individual to COVID-19 except in certain circumstances, such as knowingly failing to warn an individual of a risk or flagrantly failing to implement or comply with government-promulgated standards, guidance, or protocols intended to lower the likelihood of exposure to the disease that were applicable to the person or the person’s business.

Nonetheless, even an unsuccessful lawsuit can prove to be an expensive undertaking for an employer. Employers should exercise caution. This includes staying up to date on the latest OSHA and CDC recommendations for a safe workplace to reduce risk of liability, following local health department guidance, and consulting employment counsel.

Look for more details in the feature story “Vaccines and the Workplace: Are Employers Inoculated from Liability?” in the Employment Practices Compliance issue of @Work magazine, an exclusive DMEC member benefit.