As state and local governments throughout the country struggle to define which construction is “essential” and which construction is “non-essential,” one topic of conversation has been overlooked: what liability exposure does a contractor have to its workers if it continues with work that is later deemed non-essential? While certain liabilities may be covered by the workers' compensation laws of various states, other liabilities may not.

Since the inception of the COVID-19 pandemic, there has been a proliferation of state and local government orders, including stay-in-place and similar orders. The 50 state Construction Shutdown Tracker by Foley & Lardner, LLP provides a summary of the law in those jurisdictions where construction is implicated and provides links to each order. The Shutdown Tracker demonstrates the divergent approaches taken across jurisdictions regarding whether, in fact, construction is an essential service. The lack of a federal policy applicable to projects nationwide has contributed to this patchwork of inconsistent orders and regulations throughout the country.

The battle that took place in Massachusetts is illustrative. Boston Mayor Marty Walsh issued a special order shutting down all construction projects absent any overarching state or local stay-at-home order, taking effect March 16. Thereafter, on March 25, Gov. Charlie Baker (R-Mass.) issued an order mandating that construction continue throughout the state. Those competing directives led to the issuance of additional clarification, ultimately resulting in varying approaches on state and municipal levels with Walsh holding firm to his construction moratorium and Baker responding by increasing the focus on safety.

At the heart of the battle was a concern by the mayor for the health and welfare of trade laborers. Could workers be protected even if the new OSHA guidance was followed? Should construction companies be allowed to require workers to continue providing services in light of the risk? On March 31, Baker reissued the state's listing of COVID-19 Essential Services—in seeming agreement with Mayor Walsh's initial determination that construction must stop—to broadly prohibit construction except in limited circumstances. These new guidelines went into effect in Massachusetts at 12 p.m. on April 1.

In contrast, most construction in Wisconsin was deemed essential with the exception of undefined “aesthetic or optional” construction. In light of this order, the Milwaukee Journal Sentinel published a story questioning whether the redevelopment of a former mall, among other listed projects, was an essential construction project. This particular story foreshadows a scenario that could play out in the courts in the future. Should contractors continue to expose workers to a potentially deadly virus in order to accomplish completion of commercial and retail stores? Certainly there were significant economic considerations, but is a mall redevelopment an “essential” project?

What's Essential?

As states continue to battle with the definitions of “essential” and “non-essential” construction, contractors are left to decide whether to continue their projects. The truly essential projects are relatively easy to identify, such as hospitals and water treatment plants. Similarly, truly non-essential projects, such as retail clothing stores, are also easy to identify. But what about the gray areas? If a project is not clearly essential, are the risks of continuing worth the reward?

While no one can predict how legislatures, plaintiff's lawyers, judges and juries will look back on activities undertaken during the pandemic, contractors should assume that all actions will be scrutinized. If workers become ill or tragically pass away, will legislatures enact legislation expanding contractor liability? Will a lawsuit or class action be filed?

Undoubtedly, there will be scrutiny over whether or not the project was “essential“ in the first instance. If it is not, questions will be asked about why the project was allowed to continue in the face of such peril. Even if the project is later confirmed to be essential, the next questions will focus on the thoroughness and implementation of an updated safety plan incorporating the COVID-19 pandemic OSHA guidance—all of which should be reviewed carefully and implemented diligently.

While the duration of the potential shutdown and the re-establishment of the supply chain is unknown, during these uncertain times, contractors should objectively assess the risks of continuing with projects that could be deemed non-essential in the future. Moreover, for those projects that continue, a thorough and thoughtful revision of health and safety plans and strict adherence to those plans is critical.