Freedom loving people have always focused on taxation, regulatory burden, state debt and an unencumbered Second Amendment when analyzing whether it is time to move their business or just take their talent to a more appreciative state. The exodus from high tax, legislatively stifling states to states offering more liberty accelerated in recent years as documented regularly by ZeroHedge:
- 3 Simple Charts That Help Explain Why 9,000 Businesses Have Left California In Just 7 Years
- It's Time To Go: Over Half Of All California Voters "Have Considered Leaving The State"
- Leaving Illinois: "Does Anybody Care About People Like Us?"
- Over-Taxed: The Middle Class Is Being Wiped Out, NJ Residents Flee In Droves
Sources:
This then
results in these final rankings:
Overview of the Employer Liability Rules in Play
In general, workers injured in the workplace will receive compensation and benefits under the applicable state’s workers’ compensation laws. Benefits are provided irrespective of fault and are generally the exclusive remedy for workplace injuries, illnesses, or fatalities. Nearly all workers in the United States are covered by workers’ compensation.
The system is sometimes referred to as a grand bargain between employers and workers. It developed early in the 20th century in response to dissatisfaction with the tort system as a method of compensating workers for workplace injuries, illnesses, or deaths. Under this grand bargain, workers receive guaranteed, no-fault benefits for injuries, illnesses, and deaths, but forfeit their rights to sue their employers absent some form of willful, extremely reckless or grossly negligent employer behavior. Employers receive protection from lawsuits but must provide benefits regardless of fault.
COVID-19 now has states, employers and the federal government scrambling to come to grips with how the resulting illnesses and deaths will impact employer tort liability and workers’ compensation laws. Beyond the worker impact of COVID-19, businesses must further consider tort suits brought by customers and venders who claim that the business failed to act as a reasonably prudent business in the same or similar circumstances and that failure resulted in a COVID-19 infection. This legal upheaval is no small matter, no matter how it is approached. As stated by The Hill:
One U.S. law firm suggested coronavirus litigation could be “the new asbestos,” referring to a wave of personal injury litigation in the 1970s and '80s related to the carcinogenic material that was once commonly used in building construction.“If you just let it all go now, it would be a disaster,” said David Rivkin, a partner at Baker Hostetler, who supports Congress granting businesses temporary immunity. “It would be a tsunami of lawsuits. Hundreds have already been filed.”Therefore, as we review the list of states presenting entrepreneurs and businesses with the best opportunity to thrive, it makes sense to take an early look at how states plan to handle business liability for COVID-19 as well as the states most (and least) likely to have destructive riots and looting.
States Seeking to Shield Business from Onerous Lawsuits
“Bless this immunity.” - Tool, Fear Inoculum
From The Hill:
Many states have granted some form of liability immunity to health care workers and facilities. Utah and North Carolina have gone the furthest, passing laws that offer the strongest immunities yet for a range of industries as stay-at-home orders and business closures are eased.Alabama Governor Kay Ivey signed a proclamation that provides liability protections for businesses, healthcare providers, and other covered entities during the COVID-19 pandemic. I provides that businesses are not liable for a person’s death, injury, or property damage that results from an act or omission related to COVID-19, in any way, unless clear and convincing evidence otherwise proves that the harm was caused by the entity’s wanton, reckless, willful, or intentional misconduct.
In Utah, Gov. Gary Herbert (R) signed legislation earlier this month that makes all businesses and individuals immune from litigation based on others’ exposure to coronavirus on their property, with exceptions for things like willful misconduct. Oklahoma lawmakers have sent similar legislation to its governor.
North Carolina’s law is narrower than Utah’s and applies to “essential businesses” as defined in the state’s emergency declaration, but still offers more protection than other states.
At least six states — Alabama, Illinois, Louisiana, Ohio, South Carolina and Wyoming — have introduced legislation that would also shield more than just health care workers and facilities, according to the National Conference of State Legislatures (NCSL).
The proclamation also creates a standard of care, which requires entities to reasonably attempt to comply with applicable public health guidance in response to COVID-19; and protects businesses from liability for damages from mental anguish, emotional distress, or for punitive damages.
States Making Things Worse for Employers
“Enumerate
All that I'm to do
Calculating steps away from you” – Tool, Fear Inoculum
As David Lindsay and Erinn Rigney wrote at the National Law Review:
Perhaps the most significant pronouncement was by California Governor Gavin Newsom, who issued an executive order on 6 May 2020 that establishes a rebuttable presumption in workers’ compensation claims, presuming that covered workers who are diagnosed with COVID-19 contracted the illness at work, without the employee having to provide any further proof. Although this presumption is rebuttable—meaning that an employer can provide evidence to refute the presumption, it is likely to be a high burden for employers to meet, especially given the wide variety of ways COVID-19 can be transmitted. Further, California extended the presumption to any worker who reported to work outside of the home at the direction of their employer and received a positive test or physician diagnosis, a far broader category of workers than most other states. Therefore, in California, most eligible workers’ claims relating to on-the-job COVID-19 exposure likely will be covered by workers’ compensation.Riots Destroying Your Investment
On the good news front, auto, homeowners, and business insurance policies generally include coverage for property losses caused by riots and civil commotions. Standard business property insurance policies provide coverage for the structure of the building as well as the contents inside. Furthermore, Business Interruption (BI) coverage generally does reimburse losses when a covered peril forces a business to temporarily close its doors and pays employees, venders, rent and electric bills.
Nevertheless, this coverage is far from an inoculum against the perils of social unrest. Sixty percent of businesses with less than 100 employees do not even have (BI) coverage. For those that do, the lost income is calculated on a 12-month, look-back assessment of a business’ income prior to the date of loss. This means a business that has been shut or operating at a limited capacity due to COVID-19 will receive a reduced payout for any business income claims due to the recent rioting and looting.
Furthermore, no business owner wants to deal with the cleanup, claim process and resultant escalation in premiums after the fallout of such social unrest. So, as we consider the freest and most economically viable states for relocation, it makes sense to also factor in that state’s proclivity for social unrest and rioting. The below map was created at 11:30 AM PST on May 31, 2020 in the midst of the protests and social unrest resulting from the horrific alleged murder of George Floyd at the hands of former Minneapolis police officer Derek Chauvin. As of the time of this post, Derek Chauvin has been charged with 2nd degree murder in Minnesota.
As you can see from this map, some of the freest and most desirable states for business and employment also happen to be some of the least likely places that a business will confront rioters and looting. Montana, Idaho, Wyoming and the Dakotas form a 5-state zone remarkably free from social unrest and property damage.
Best States in 2020-2021
Before 2020, businesses and entrepreneurs were leaving deep blue states for greener pastures in less encumbered jurisdictions. The pandemic, social unrest and devastating economic collapse coupled with the fact that so many more people are learning they can effectively do their job remotely through video-conferencing platforms will only accelerate this trend. Additionally, some states now seek to encourage the reopening of business by shielding employers from an onslaught of lawsuits due to complains that employees and customers could have contracted COVID-19 in the workplace. Conversely states like California seek to pin that responsibility on employers by creating a presumption that an employee’s sickness resulted from the workplace.
Utah, North Carolina, Wyoming and Alabama’s bold leadership in this regard elevate those states status for consideration in the new, post-pandemic workplace. In Utah and Oklahoma’s cases, you could argue that it might move them up into the top 10. While Alabama and North Carolina’s efforts are good for business, they are not enough to overcome those states’ weaker performance in other economic indices.
Choice of jurisdiction matters. As we move through ever-increasing tumultuous times, that choice becomes that much more important. California, New York, New Jersey and Illinois have co-opted individual liberties, saddled their people with an unsustainable debt, regularly punish the job creators and entrepreneurs while also being the most likely states to encounter social unrest. Meanwhile, South Dakota, Wyoming, Idaho, New Hampshire and Tennessee reward hard work, creativity and honor constitutional freedoms. Keep that in mind as you vote with the location your homes and businesses.
