New Legal Perils for BIO RECOVERY Business by ED Cross
Monday, October 5, 2020
Posted by: Jamie Dillard
New Legal Perils for Bio Recovery Businesses
By Ed Cross, “The Restoration Lawyer”
The COVID-19 pandemic has increased the level of scrutiny faced by bio recovery companies, as the general public grows wary of opportunists preying on the vulnerable, and COVID-19 consumer scams are widespread, including offers for testing that is bogus. The industry faces significant risk exposure from a vast array of laws and regulations that dictate what claims can be made about disinfection, and how jobs must be performed.
A Texas cleaning franchise received a lot of negative attention after securing a $1.4 million contract to perform disinfection services for a school district. The company sold the job with claims that its electrostatic spraying process would provide a residual “kill” of coronavirus for 90 days, and that students would be “protected for 90 days.” The President of the PTA said “If it gives parents peace of mind about sending their kids to school, then great, it’s money well spent,” but admitted that the District might have given parents a false sense of security. The company later denied saying its process would prevent COVID-19 on surfaces for 90 days, and the franchisor told NBC that the EPA would not allow a 90-day claim.
Unbeknownst to many, products that are effective against viruses are considered pesticides and must be registered with the EPA. They may not be sold or distributed unless they have been properly tested and are EPA registered.
Just because a product label states that it kills 99.5% of viruses does not necessarily mean it will kill SARS-CoV-2. Before a provider can make claims about a disinfectant on its web site or in literature, the EPA must authorize the claims.
The EPA is authorized to take enforcement action to prevent the sale or distribution of disinfectants with false or misleading claims on their labeling. EPA is also authorized to take enforcement action to prevent the sale or distribution of unregistered disinfectants when the seller or distributor is making claims that they work against SARS-CoV-2, and to prevent the sale or distribution of registered pesticides when SARS-CoV-2 claims are made that are not permitted by the terms of their registration.
EPA will not register a product until it has determined the product will not pose an unreasonable risk and that it will be effective when used according to the label directions. The EPA’s List N is a list of disinfectants that meet EPA’s criteria for SARS-CoV-2. An often-overlooked nuance is that the placement on List N merely means that EPA has registered the product as meeting the agency’s criteria for effectiveness. It does not mean EPA has “approved” the product. Many service providers are facing legal peril because they have falsely promoted their products as “EPA-approved,” when in fact, they are only registered. This is not to say the EPA never approves products. In July 2020, EPA approved two Lysol products based on laboratory testing showing they are effective against SARS-CoV-2.
The Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) governs the registration, distribution, sale, and use of pesticides. FIFRA prohibits the sale or distribution of pesticides that are unregistered, misbranded (e.g., their labeling includes misleading claims), and the sale or distribution of registered pesticides with claims that substantially differ from those allowed under the terms of their registration. FIFRA also prohibits the sale of misbranded pesticide devices.
The EPA warns consumers to be wary about claims made about machines used to mitigate viruses. EPA does not register these machines. The devices may bear an EPA “establishment number,” but the EPA does not review machines or claims made about them. Machines are also subject to FIFRA’s prohibition against false claims. The EPA has expressed concerns that fogging and misting methods may not be adequately effective because they result in the delivery of a smaller amounts of the active ingredient, and particle sizes which may be less effective than those delivered by spraying or wiping. It also expressed concern if no pre-cleaning is performed before fogging. The EPA will examine all efficacy data about fogging and misting products and practitioners should monitor the EPA’s reports closely, being cautious in making claims about fogging and misting.
“The label is the law” and any cleaning company that promotes or uses a pesticide product inconsistent with its labeling faces serious legal and financial consequences.
Unbeknownst to many, at least 16 states require licenses and/or certifications to apply antimicrobials. Many companies unknowingly run afoul of these rules, which are not widely publicized. The rules can be difficult to find and decipher. A collection has been developed and is available here.
The misuse of pesticides presents significant risk to workers. Any work related injury that requires medical treatment beyond first aid or time away from work is a “recordable injury” under OSHA rules. All work-related hospitalizations must be reported to OSHA. Businesses are subject to a $5,000 penalty for the failure to report. They are subject to penalties of more than $13,000 per violation when a workplace hazard could cause serious physical harm, and more than $130,000 when the employer knowingly fails to comply with a legal requirement or acts with plain indifference to employee safety.
As businesses re-open, they face increased risk from the transmission of COVID-19 within the workplace. The CDC recommends that employers consider conducting daily in-person or virtual health checks. Employers must maintain all information about employee illness as confidential medical record in compliance with the ADA. As of March 2020, employers may measure employees’ body temperature. As with all medical information, the fact that an employee had a fever or other symptoms would be subject to ADA confidentiality requirements.
The exposure does not end there. Service providers are at risk of liability claims from customers who allege that workers in their properties infected occupants with COVID-19. To prevail in these claims, the customers need not definitively prove the source of the illness with scientific certainty. The burden of proof in a civil case is a preponderance of the evidence. The plaintiff need only prove that it was “more likely than not” that the defendant caused the illness. A mere probability will suffice, which is easier to prove than one might assume.
Businesses can protect themselves from this risk with contracts that have carefully-crafted scopes of work, and strong hold harmless and indemnity provisions. Unfortunately, many disinfection contracts over-promise and leave the service provider vulnerable to claims of breach of contract and misrepresentation. Good contracts are cheap insurance.
“The Restoration Lawyer” Ed Cross specializes in representation of cleaning, restoration, and bio recovery companies across the U.S. His web site is TheRestorationLawyer.com, and he can be reached at EdCross@EdCross.com or by calling 760 773-4002.
Disclaimer: This article is intended for general information purposes and is not intended to be legal advice. Each case is different and this is not a substitute for the advice of a lawyer.