COVID-19 Guidance for Restaurants and Other Food And Beverage Retailers

The COVID-19 pandemic is having an extreme impact on restaurants as well as other food and beverage retailers nationally. This guidance addresses some of their most frequently asked questions.

1. What Resources Are Available for Small Food and Beverage Retailers Suffering Financially as a Result of COVID-19?

Many states are closing or limiting the occupancy of food and beverage retailers or rendering them drive-in or drive-through-only facilities by emergency order. On March 12, the U.S. Small Business Administration (SBA) announced that it will work with state governments to provide targeted, low-interest disaster recovery loans to small businesses severely impacted by the outbreak. The loans may be used to pay fixed debt, payroll, accounts payable and other bills that cannot be paid because of the disaster's impact, usually at the rate of 3.75 percent.

2. Do Restaurants and Food and Beverage Retailers Have a Duty to Inquire of and Exclude Employees Exposed to COVID-19?

Some states, such as Florida, and local governments have issued emergency executive orders forbidding employees infected with COVID-19 or exposed to COVID-19 from entering restaurants. The General Duty Clause of the Occupational Safety and Health Act, 29 U.S.C. § 654(a)(1), and many corollary state laws, already require employers to furnish to each worker "employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm." Accordingly, the Occupational and Safety Administration (OSHA) advises that employers implement policies that will result in the "prompt identification and isolation of potentially infectious individuals." OSHA requires employers to record COVID-19 illnesses among the workforce only when the virus is contracted in the workplace. These records must be submitted to OSHA on Form 300A and maintained onsite.

The Centers for Disease Control and Prevention (CDC) recommends that if an employee is confirmed to have COVID-19, employers should inform co-workers immediately so that they can seek appropriate medical screening or care. Employers should provide general information to employees if an employee is infected but should not specifically disclose the identity of any infected employee, except, as discussed below, with persons who can prevent or lessen a serious and imminent threat to the health or safety of the public. See 45 C.F.R. § 164.510(a); cf. 45 C.F.R. § 164.508. The personal information should be the minimum necessary to accomplish the purpose. Any information gathered about an employee's health must be kept separate from his or her general employment file and treated as a confidential medical record.

An employer's failure to inquire of employees about exposure could give rise to legal actions for negligence and other claims. Workers' compensation claims are also possible for respiratory diseases to the extent the employee can establish causation from the workplace environment and that his or her occupation presents a particular hazard of the disease occurring so as to distinguish other occupations. The CDC recommends that employers separate sick employees from other employees. Therefore, even if not required to exclude employees with respiratory illness by emergency order, retailers should strongly consider doing so. Asking an employee who has been absent from work for a medical reason is not a violation of the ADA. Nor is requiring an employee to provide a doctor's note certifying fitness to return to work.

During a pandemic, exceptions to the Americans with Disabilities Act's (ADA) restrictions on employer health inquiries allow employers to inquire about an employee's potential infection with the disease and travel from high risk locations.¹ The ADA's "direct threat" rule allows inquiries because an employee infected with COVID-19 will pose a direct threat to co-workers and others in the workplace. 29 C.F.R. § 1630.2(r). State and local laws may also include a direct threat exemption or other exemptions or defenses such as the bona fide occupational qualification defense. In contrast, an employee who is ill with something else such as the seasonal influenza does not have a disability under the ADA. Some state and local laws also define disability in a manner that rules out communicable diseases. Consult these laws carefully.

Employers may ask employees if they believe they have come into contact with someone who has been exposed to the virus, but may not ask employees whether they have a medical condition that could make them especially vulnerable to the virus. Furthermore, due to the Genetic Information Nondiscrimination Act (GINA) and corollary state laws, employers are restricted from inquiring about family members or their recent potential exposure. 42 U.S.C. § 199gg-91(d)(16)(A); 29 C.F.R. § 1635.3(c) (protected genetic information includes "[t]he manifestation of disease or disorder in family members of the individual (family medical history)").

An employee who is asked by the employer to self-quarantine for the COVID-19's incubation period (which is currently identified as 14 days) may be eligible for protected leave under the Family and Medical Leave Act (FMLA) and corresponding state laws. On March 18, 2020, President Donald Trump signed the Families First Coronavirus Response Act, H.R. 6201 (FFCRA) to address the impact of the COVID-19 national health emergency. Among other provisions, the FFCRA provides up to two weeks of paid sick leave and up to 12 weeks of paid family medical leave to help those dealing with medical issues relating to COVID-19. FFCRA will be effective no later than April 2, 2020. 

3. Do Restaurants and Food and Beverage Retailers Have a Duty to Report a Threat of Exposure, and Must They Exclude At-Risk Customers?

The CDC recommends coordination with state and local health officials over exposure and threats of exposure. Owners or managers of restaurants, dairies, or other food handling or processing establishments may even be mandatory reporters of communicable diseases and illnesses to local health authorities under state or local laws, which commonly define communicable disease in a manner implicating COVID-19 as an illness that occurs through the transmission of an infectious agent or its toxic products. The common law may also impose a duty on retailers to report any threat of exposure. Retailers may also have a duty to disinfect and remediate the premises and to exclude exposed individuals. Several states recognize a cause of action for negligent communication of a communicable disease in cases involving plaintiffs who were exposed to their detriment by others who negligently failed to tell them or take reasonable steps to prevent it. The CDC has published cleaning and disinfection guidance, and called for frequent and vigorous application.

Food and beverage retailers are also commonly "places of public accommodation." As such, they may not discriminate against individuals on the basis of disability in the full and equal enjoyment of services and facilities. 42 U.S.C. s. 12182. The "direct threat" exception in federal law allows public accommodations to exclude an individual if that individual poses a direct threat to the health or safety of others that cannot be mitigated by appropriate modifications in the public accommodation's policies or procedures, or by the provision of auxiliary aids. 28 C.F.R. s. 36.208(a). State and municipal public accommodation laws vary widely in whether they also incorporate a direct threat exception or another exception or defense, meaning you should consult state and local law before denying benefits to guests or customers except under direct emergency order.

4. What Happens When Restaurants and Food and Beverage Retailers or Vendors Cannot Perform Contracts Due to the Virus?

The coronavirus is certain to test jurisprudence pertaining to force majeure clauses, impossibility of performance, and, relatedly, so-called "acts of God." State law will govern these issues. Force majeure clauses are typical in commercial contracts. The ultimate resolution of their applicability will depend closely on the terms of the contract and the specific circumstances concerning performance. Such clauses usually address "causes beyond the control" of the contracting party. Disputes about whether the clause applies in a given case will commonly focus on what is causing one party to fail to perform a contractual obligation. Those clauses that specifically reference epidemics or pandemics will have the greatest force.

Impossibility of performance or commercial impracticability can be defenses to contract performance. Under the impossibility of performance doctrine, a party is discharged from performing a contractual obligation when the obligation is impossible to perform due to unforeseeable circumstances. Mere inconvenience or increased cost does not usually meet the standard. An "act of God" may be the reason for the impossibility of performance. "Acts of God" are also commonly listed in force majeure clauses. Each state addresses this issue slightly differently, but "acts of God" have been described as acts or occurrences "so extraordinary and unprecedented that human foresight could not foresee or guard against" them and for which negligence or want of diligence, judgment or skill played no part. See Fla. Power Corp. v. City of Tallahassee, 154 Fla. 638, 646, 18 So. 2d 671 (1944); Cain v. Atlantic Coast Line R. Co., 74 S.Ct. 89, 54 S.E. 244, 247 (1906).

5. May Restaurants Sell Alcohol?

Many states are issuing emergency orders suspending all sales of in-restaurant or bar alcoholic beverages, and others are issuing temporary reprieve orders to permit restaurants to sell alcohol in sealed containers directly to consumers, with food as part of delivery or "to go" orders, subject to confirmation of identification. The list of states adopting such responses to the coronavirus grows by the day. Below are current examples:

• The Louisiana Office of Alcohol and Tobacco Control (ATC) will expedite issuance of delivery permits. On a temporary basis, the ATC will allow restaurant permit holders to sell or offer for sale pre-packaged beer and/or wine via drive-through or curbside pick-up.
• The Texas Alcoholic Beverage Commission temporarily suspended the off-premises limitation on restaurants, so that restaurants that hold a Mixed Beverage Permit may conduct "to-go" alcohol sales as well as alcohol deliveries to consumers.
• Alabama's Alcoholic Beverage Control Board issued an emergency rule authorizing curbside pick-up and take-out services for Alabama businesses who hold a license that allows the sale of alcoholic beverages for on-premises consumption only and/or off-premises consumption. The licensee may sell no more than one 750-milliliter (mL) bottle of spirits, one 750 mL bottle of wine or one six-pack of beer per customer in a sealed, unopened container. The employee processing and handling the pickup or takeout sales must be age 21 or over, and the licensee must continue to follow all other ABC rules and regulations regarding sales of alcoholic beverages.
• In New York, Gov. Andrew Cuomo ordered the State Liquor Authority (SLA) to promulgate guidance on new off-premises privileges for licensed businesses with on-premises privileges. The SLA guidance provides that alcoholic beverage sold for off-premises consumption may be sold in any closed and any sealed original container of any size, provided that the sale of each container shall be accompanied by the purchase of food. Additionally, alcoholic beverages sold for off-premises consumption may be sold for takeout from the licensed premises or may be delivered to the customer's residence.

Next Steps

Restaurants and food and beverage retailers should exercise caution and continue to monitor official guidance. For more information about this topic or questions regarding the steps that your specific organization should be taking, please contact the authors.

DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact the author or your responsible Holland & Knight lawyer for timely advice.