Boards Face Worker Safety Issues As Nation Reopens

As pressure mounts for companies to end business shutdowns and begin operating as close to normal as possible, directors need to be aware of their risk.

Worker safety is becoming a board priority as the nation prepares to recover from the Covid-19 pandemic over the next few months. Some companies have already been forced to shut down because of coronavirus-related deaths while others are facing employee protests related to concerns about unsafe working conditions. Corporate boards must work with their management teams to develop new workplace strategies that prove to regulators that they are serious about protecting workers, while also shielding their companies from future employee lawsuits.

In early May, the Food and Environmental Reporting Network reported that nearly 12,000 meatpacking and food processing workers had tested positive for Covid-19 and at least 48 had died. Smithfield, Tyson Foods, Hormel, Kraft Heinz, Conagra, Ford and others have all experienced plant closures due to coronavirus infection fears. Other manufacturers such as Lear Corp. are dealing with infections and deaths at factories in Mexico. Amazon warehouse workers in Michigan, New York, Illinois and Minnesota staged walkouts in April over what they felt were unsafe working conditions due to Covid-19. Intel Corp. employees have filed numerous complaints with regulators alleging the company prioritized productivity over worker safety at its chip manufacturing facilities. All companies will have to deal with issues similar to these as pressure mounts for them to end business shutdowns and begin operating as close to normal as possible.

Discussion points at board meetings should include:

• Direct engagement with OSHA and other state and federal regulators. The Occupational Safety and Health Administration has stated that it expects companies to show “good faith” efforts to keep workers safe during the pandemic. Companies should reach out to OSHA and other authorities and make sure there is a clear understanding of what constitutes maintaining “good faith” safety conditions for their industry. Once directors have that information, they can be sure to remain in compliance as they implement their strategy for ramping up operations. By conferring with regulators, the impact of any future complaints or lawsuits can be mitigated by evidence that they followed guidance of regulators “in good faith.”

• Direct engagement with employees. It is important for companies to make a sincere effort to find out how their employees feel about returning to work and worker safety. Communicating with employees will be important to maintain their confidence in management and their loyalty to stay with the company during uncertain times and imperfect working conditions. Directors will need to work with management to craft clear and effective responses to worker demands for social distancing protocols, face masks and other protective gear, pay increases for “hazardous conditions,” increased healthcare coverage, additional time off and assurances that worksites will be cleaned and disinfected regularly. Developing policies to deal with each of these worker issues and then selling employees on accepting them will be an essential step for most companies.

• Direct engagement with shareholders. As companies develop their strategies for dealing with employees and ramping up their operations, they will have to convince shareholders that what they are doing is in the best interest of the company. Directors must communicate how the workforce will change, and how those changes will affect productivity and potential revenues. Directors may also have to communicate what the new workforce strategy will be going forward. This could mean keeping workers safe by allowing additional flexibility to work from home, or paying for new technologies to help fewer workers maintain social distancing while being more productive.

• Impact of the cost of worker safety measures. Implementing worker safety measures will incur costs. Boards have to decide how much in financial resources they will commit to worker safety and convince both shareholders and employees that they are allocating enough to keep workers safe. For food manufacturers, hotels, travel companies and other service industries, how much cleaning and re-cleaning will need to be done to make sure consumers feel safe enough to use their services? Directors will have to determine how to navigate all of these costs without negatively impacting revenues.

• Defending against potential litigation. Unfortunately, potential worker lawsuits will be a reality for many companies, especially if deaths result from coronavirus infections in the workplace. Boards will want to review their company’s insurance coverage for worker deaths and insurance for operations disruptions that might result from any type of worker actions.