A federal district court has refused to dismiss a lawsuit filed by McDonald's Corp. and two McDonald's franchisees against its insurer, Austin Mutual Insurance Co., for refusing to defend McDonald's in COVID-19 litigation filed by the fast-food chain's employees, three of whom have either contracted the virus or fallen ill and experienced symptoms of the virus. The case is McDonald's Corp. et al. v. Austin Mutual Insurance Co., filed in U.S. District Court in Chicago.
Workers from four McDonald's restaurants and family members and cohabitants filed the suit against McDonald's and the franchisees in October 2020, alleging public nuisance and negligence due to the company's decision to remain open during the pandemic, while failing to comply with "minimum basic health and safety standards at its restaurants."
The suit seeks a mandatory injunction requiring McDonald's and the franchisees to provide their employees with adequate personal protective equipment, preclude the reuse of face masks, supply sanitizer, require that customers wear face masks, monitor employee COVID-19 infections, and provide workers with accurate information about the virus.
The insurance policy provided coverage for "damages because of 'bodily injury,'" and does not have a virus exclusion, according to the ruling.
The ruling said that if the employees prevail and win the injunction, it will be due to the contraction of the virus, "an indisputable bodily injury." The ruling noted that another possible avenue for coverage is that exposure to the virus is itself a "bodily injury" that the fast-food chain and its franchisees would be forced to expend 'damages' to remedy.
According to the ruling, "Either argument may not wow everyone with its brilliance, and Austin Mutual might even have the better interpretation. But this is not a dispute about the better interpretation: It is a dispute about a potential and legally defensible interpretation."
Editor's Note: Other McDonald's franchisees have been fined high dollar numbers for failing to comply with COVID-19 safety standards. In order to avoid similar fines, fast-food restaurants should focus on keeping up with and complying with safety standards.