Liability for COVID still playing out in courts

Article on the Perspectives Page in Business Insurance

September Issue written by:

Jeffrey Adelson and Davil Vasquez

It remains to be seen whether an employer can be found liable for an employee contracting COVID-19 and passing it along to a relative, who then suffers from or succumbs to the disease — more reason for employers to pay attention to workplace safety regulations when it comes to infectious diseases and nuanced presumption laws.  

A Dec. 21, 2021, ruling by the California Court of Appeal, Second Appellate District, is worth careful consideration by all California employers, as it implicates their potential liability for civil and personal injury damages to third parties arising from work-related infections in allowing a derivative injury lawsuit against an employer to proceed.

As relayed in the wrongful death civil lawsuit See’s Candy Inc. v. Superior Court (Ek), See’s Candy Inc. employee Matilde Ek claimed she became infected with COVID-19 because her employer allegedly failed to provide its employees with reasonably adequate protection from contracting the virus from co-workers, and that her husband died as a result. 

Meanwhile, a California district court in the similar Kuciemba v. Victory Woodworks Inc. on May 7, 2021, ruled the employer would not be liable for the severe COVID-19 hospitalization of the wife of a worker at Victory Woodworks, who allegedly contracted the illness at work and brought the virus home.

On appeal, the 9th U.S. Circuit Court of Appeals on April 21, 2022, said the Kuciemba matter belongs in the hands of the California Supreme Court, which has yet to move on the issue. 

Both cases are ones to watch, as there are currently at least 22 similar ones filed in 10 states, with the ultimate decision in California likely rippling across the country. 

To put the issue in proper context, for more than a hundred years, workers compensation laws have held that when an employee suffers a work-related injury, that employee’s exclusive remedy is, with very few exceptions, a claim for workers compensation medical and indemnity benefits against the employer until the worker is restored.

This “workers compensation bargain” entitles employees to these remedies without having to prove any fault on the part of the employer, for having caused an injury or illness. In exchange, employers gain immunity from potentially large liabilities for civil personal injury damages, which often include an award for the injured person’s pain and suffering, full loss of earnings, and even punitive damages in cases of outrageous misconduct. 

In addition, this bargain has protected employers from large civil liabilities to the heirs of employees who die as a result of their industrial injuries or illnesses. Indeed, the heirs cannot recover anything from the employer unless they demonstrate financial dependency on the deceased employee. Even when they can, the remedy does not compensate for the loss of the love, companionship, and guidance the deceased employee would have provided his or her heirs, had the employee survived. By contrast, juries often highly evaluate such damages when rendering verdicts in civil wrongful death trials.

In California, the labor code embodying this civil damage immunity states the workers compensation remedy is “in lieu of any other liability whatsoever to any person.” (Emphasis added). In furtherance of this apparent intent to broadly immunize employers from civil liability for industrial injuries, not only to injured employees but “to others,” the courts have held that a workers compensation claim by the injured employee, or by his or her dependents, is also the exclusive remedy “for certain third-party claims deemed collateral to or derivative of the employee’s injuries.”

This “derivative injury doctrine” immunizes California employers from claims by the heirs of deceased workers for civil wrongful death damages. It prevents the spouses of injured employees from suing employers in civil court for loss of consortium damages, which include the loss of love and sexual relations. 

Cases such as See’s Candy, especially, appear to weaken this immunity.

See’s challenged the lawsuit right from the outset. Its lawyers argued that even if all of the complaint’s allegations were assumed true, the legal immunity afforded by the labor code and the derivative injury doctrine precluded Ms. Ek’s claims. To the surprise of many, both the trial judge and the Court of Appeal disagreed and allowed the case to proceed.

The thrust of the court’s opinion distinguishes between a third person suffering damage as a direct result of an employee’s industrial injury or illness, which would trigger the derivative injury doctrine, and a third party suffering an injury as a direct result of the employer’s negligence in exposing that third person to a toxin, which exposure the court concluded would have occurred whether or not Ms. Ek herself became sick. 

The court reasoned that it was not Ms. Ek’s suffering symptoms of an illness that caused her husband’s or their children’s wrongful death damages, but her infection that rendered her a conduit for spreading COVID-19 as a result of See’s alleged negligence. The derivative injury doctrine did not necessarily afford See’s exclusive remedy immunity from civil damages. 

As a result of the different outcomes in See’s and Kuciemba, the California Supreme Court is now asked to clarify: If an employee contracts COVID-19 at his workplace and brings the virus home to his spouse does California’s derivative injury doctrine bar the spouse’s claim against the employer? And under California law, does an employer owe a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19?

One of the unexpected consequences of the many COVID-19 presumptions across the nation will be the ease with which the plaintiff will be able to overcome the obstacle of causation. 

In addition to further eroding the exclusive remedy rule that protects California employers from civil liabilities arising from work-related injuries, there are other takeaways: Employers must adhere to workplace safety policies and procedures recommended by county, state and federal agencies, and create and preserve documentary evidence of compliance with these guidelines and regulations.

In the context of the current COVID-19 pandemic, those employers that can produce believable records evincing regular training of employees about safe distancing, masking, testing and vaccination, as well as records that demonstrate proper equipping of employees and enforcement of safety protocols, should be able to successfully defend civil lawsuits that are now likely to follow in the wake of the See’s decision.

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About Jeffrey Adelson and Davil Vasquez

Jeff Adelson, General Counsel and Co-Managing Partner at Adelson McLean, has practiced in the field of Workers’ Compensation for almost 40 years. In addition, Jeffrey Adelson’s legal career includes experience in the areas of civil, family, and criminal law. He enjoys the field of employment and Worker’s Compensation. A strong believer in human rights, he abhors any type of intolerance.

Davil Vasquez has over 25 years of litigation experience before both the State and Federal courts of California, before the Workers’ Compensation Appeals Board, and before the California Court of Appeal.

His practice focuses on representing employers, businesses and their insurers in a wide range of legal matters, including the defense of civil liability tort actions, employee discrimination (Labor Code 132a) and misconduct (Serious & Willful) claims, and business disputes.