By Michael S. Li, Esq.

The COVID-19 pandemic, which has dominated headlines for the past two years, continues to generate a variety of uncertainty for businesses.  In the construction world, challenges including inflation, supply chain shortages, increases in shipping costs, and difficulty finding available workers have been causing headaches for many months.  Coupled with destabilizing global events like the Russian invasion of Ukraine, these obstacles continue to make things tough on the balance sheet.  In addition to these problems, business owners should be aware of another cause for concern: “Take-Home” COVID-19 litigation.

Plaintiffs’ lawyers continue to be creative with pandemic-related legal theories against employers.  Piggybacking on a principle established in asbestos-related cases, courts have been prompted to examine situations where an employee is exposed to and/or infected by the coronavirus on the job and subsequently passes the infection on to a third party outside of the workplace.  Broadly speaking, the central issues in such claims are whether recovery for these types of injuries can be pursued (i.e., is that a viable legal claim at all?), and if so, whether an employer owes a duty to third parties arguably injured in this fashion.

How Courts and Legislatures Are Grappling with “Take-Home COVID-19” Claims

More than a dozen “take-home COVID-19” cases have been filed in states across the nation.  Claims have been brought against big name corporations like Amazon and Walmart, attracting a great deal of attention from industry watchers.  Trade groups like the U.S. Chamber of Commerce caution against a potential Pandora’s box of exposure for businesses if such claims are allowed to proceed.

Given the lack of precedence in such situations, state courts are addressing the novel legal theory in different ways.  Anticipating an increased level of litigation, some states have passed laws shielding businesses from civil liability unless there is an elevated level of wrongful conduct beyond the typical standard of negligence.  Such states include Alabama, Louisiana, and Utah.  In other jurisdictions, such as Nevada, Texas, and Florida, businesses are protected from tort liability where they have made a good-faith effort to substantially comply with government standards regarding COVID-19.

Here in the state of California, the Legislature has not adopted any blanket “take-home COVID-19” liability shield for employers, thus leaving the door open for plaintiffs.  In particular, a recent spate of cases has scrutinized the role of worker’s compensation for such claims in California.

Generally, workers’ compensation laws represent a compromise where employers guarantee benefits to employees who suffer injuries while on the job without regard to fault.  In exchange, an injured employee’s recovery is limited to the remedies provided by the workers’ compensation regime enacted by a state.  Similar to an employee who sacrifices their ability to pursue additional claims outside of workers’ compensation, so too do third parties who suffer injuries considered “derivative” of the employee’s injury.

In a recent development, a California appellate court drew an important distinction on the threshold issue of allowing certain third-party claims to proceed outside the scope of workers’ compensation laws.  In a “take-home COVID-19” case brought against See’s Candies, plaintiff Matilde Ek claimed that she was exposed to COVID-19 at a factory due to insufficient safeguards.  She contracted the coronavirus and, while recuperating from COVID-19 at home, transmitted it to her husband, who later passed away from the infection.

Mrs. Ek claimed See’s Candies was negligent.  See’s Candies argued her claims should be dismissed because they were covered by the Workers’ Compensation Act.  The trial court rejected See’s Candies argument.  See’s Candies appealed.  The appellate court confirmed the trial court’s ruling, finding that the husband’s injuries were derivative.  See’s Candies asked the California Supreme Court for review.  In April, the Supreme Court declined that request, leaving the lower court rulings in place.  The plaintiff is permitted to proceed and  litigate whether See’s Candies owed a duty of care to Mr. Ek, and whether that duty was satisfied or not.  The point here, though, is that such a claim by an employee’s spouse is possible.  At least for now, in California, the answer is yes.

The See’s Candies case likely won’t be the final word on “take-home Covid-19” claims in California.  In its own ruling, the appellate court attempted to limit the applicability of its decision, noting that defining the scope of the Workers’ Compensation Act is a task better left to the Legislature.  In a separate proceeding based on similar circumstances, judges in the federal court system have suggested that they will leave interpretation of state laws to the California Supreme Court.  Suffice it to say that California law is unsettled on potential employer liability for “take-home COVID-19” cases.

Measures to Reduce Your Potential Liability

Deemed essential businesses, construction operations (like food processing companies including See’s Candies) were allowed to continue operating during the pandemic.  However, operations remained subject to a myriad of ever-changing rules and regulations from a variety of authorities at the federal and state levels like the Centers for Disease Control and Prevention (CDC) and California Division of Occupational Safety and Health (Cal/OSHA).  In addition, local jurisdictions like the City of San Diego and County of San Diego also adopted their own safety precautions.

Under the best of circumstances, it was practically impossible to prevent all cases of COVID-19.  Consequently, no matter how diligent an employer’s efforts to operate safely and within the guidelines during the pandemic, illnesses occurred.  But whether a business did enough – whether adherence to the guidelines was in good faith or was pretextual – the door to liability remains open.

The best way to reduce liability exposure going forward is to stay up-to-date on current guidelines from the various authorities and to comply in good faith.  Along those lines, make sure to document the steps you’ve taken to comply with these guidelines and protect employee safety.  If a court should find that you owed a duty to implement reasonable safety procedures for your own employees, and possibly any third parties they may have come in contact with, you will be better positioned to establish that you satisfied the duty.

If you’re concerned about “take-home COVID-19” liability or managing potential exposure, it’s best to consult with experienced legal counsel.

 

Michael Li is an attorney with the law firm of Dunn DeSantis Walt & Kendrick whose practice focuses on construction litigation and personal injury matters. He can be reached at mli@ddwklaw.com

Dunn DeSantis Walt & Kendrick provides a broad spectrum of legal services to businesses of all sizes, from small, local start-ups and non-profits to large, national companies. DDWK’s real estate development and construction practice includes representing all segments of the development and construction industries on both private and public projects. 

You can find additional information and resources related to helping business owners and their businesses on the DDWK website.

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