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September 13, 2022
Will COVID-19 Create New Workers’ Comp Exceptions?

We have previously noted the COVID-19 pandemic will create novel legal questions for employers, most of which are yet to be answered. Although workers’ compensation is generally the exclusive remedy for workplace injuries, that system is a creature of public policy and is sometimes modified by public policy. Additionally, unlike many workplaces’ safety risks, this pandemic created health consequences that, by definition, could create injury to others.

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Now, the California Supreme Court has been asked to rule on two questions: If an employee contracts COVID-19 at his workplace and brings the virus home to his spouse, does California’s workers’ comp derivative injury doctrine bar the spouse’s claim against the employer? Does an employer owe a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19?

COVID in the Workplace

In response to the COVID-19 pandemic, San Francisco issued a shelter-in-place order in March 2020, effectively shuttering many local businesses. The restrictions were relaxed two months later when San Francisco issued a revised order (the “Health Order”) allowing certain essential industries, including the construction industry, to reopen. Although these businesses were permitted to reopen, the Health Order imposed stringent conditions on their operations to limit the spread of COVID-19.

After the Health Order was issued, Robert Kuciemba began working for Victory Woodworks, Inc., a furniture/construction company, at a jobsite in San Francisco. The only person in the household he shared with his wife, Corby Kuciemba, to have frequent contact with others was himself through his work at Victory’s jobsite. According to the Kuciembas, Victory knowingly transferred workers from an infected construction site to Robert’s jobsite without following the safety procedures required by the Health Order. He was forced to work in close contact with those employees and soon developed COVID-19, which he brought back home.

Corby is over 65 years old and was at high risk from COVID-19. She tested positive for the virus on July 16, 2020, and developed severe respiratory symptoms. She was hospitalized for more than a month after contracting COVID-19 and was kept alive on a respirator.

Is Workers’ Comp Exclusive Remedy?

The Kuciembas filed suit against Victory in the California Superior Court, alleging the company caused Corby’s injuries by violating the Health Order. Corby asserted state-law claims for negligence, negligence per se, and premises liability, and Robert filed a claim for loss of consortium. Victory removed to federal district court and moved to dismiss it on two theories.

First, Victory claimed the injury to its employee fell under the exclusive remedy of the workers’ comp system, and the same was true for the injury to Corby because the injury was derivative of the employee’s injury. Second, it argued it owed no duty to Corby, and therefore she could not sue the company.

The federal district court agreed and dismissed the claim without a trial. The matter was appealed to the 9th Circuit (covering employers in Alaska, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington).

Two Questions for California Supreme Court

There is a process for a federal court to certify a question to the California Supreme Court if there is no controlling precedent on the issue and the supreme court’s decision could determine the outcome as a matter of law. In this case, the federal court determined the legal questions presented not only met both criteria but also presented issues of significant public importance for the state: the scope of an employer’s liability for the spread of COVID-19, the application of any public policy exception to the general duty of care in the context of a pandemic, and—perhaps most sweepingly—whether California’s derivative injury doctrine applies to injuries derived from an employee’s workplace injury.

No controlling precedent resolves whether the Workers’ Compensation Act (WCA) derivative injury doctrine bars Corby’s claims. Under the WCA, employees are “afforded relatively swift and certain payment of benefits to cure or relieve the effects of industrial injury without having to prove fault but, in exchange, give[] up the wider range of damages potentially available.” The Act, however, is not the exclusive remedy just for employees. Under the derivative injury doctrine, the WCA is also deemed “the exclusive remedy for certain third-party claims deemed collateral to or derivative of” an employee’s work-related injuries.

Because Corby has alleged that she contracted COVID-19 from her husband, who contracted the virus at work, Victory has argued her claims are derivative of her husband’s workplace injury and therefore barred by the WCA’ s exclusivity provisions. The Kuciembas argue the derivative injury doctrine has been abandoned—the doctrine has been twice called into question by the California Supreme Court and has not been favorably cited by a California court in decades. They also argue court cases have limited the derivative injury doctrine to a narrow class of claims that logically or legally require a plaintiff to show injury to a third party, such as claims for loss of consortium or wrongful death.

One California court of appeal considered the issue in 2021, and it largely agreed with the Kuciembas’ interpretation and held the derivative injury rule does not bar an employee’s spouse’s claims against an employer for injuries arising from a workplace COVID-19 infection. But because of the uncertain precedent regarding California’s derivative injury doctrine, the federal court found this question suitable for certification.

Second, no California court has yet considered whether public policy favors creating an exception for employers that negligently infect an employee’s family members with COVID-19. Given its likely economic significance, the federal court of appeal concluded “the spirit of comity and federalism” dictates that California’s courts be offered the opportunity to answer this question.

Resolving these questions will dispose of this appeal, as the district court concluded the derivative injury doctrine applied and that Victory did not owe a duty of care to Corby. If either holding is correct, the district court’s ruling must be affirmed and the Kuciembas’ complaint must be dismissed. If neither holding is correct, the district court’s ruling must be reversed, and the Kuciembas’ suit must be allowed to proceed. Kuciemba v. Victory Woodworks, Inc., U.S. Court of Appeals for the 9th Circuit, No. 21-15963.

Bottom Line

First, this case presents prime examples of questions about which the federal courts will defer to the California Supreme Court to address—federalism at work.

Second, the federal court expressly invited the California Supreme Court to consider “whether public policy favors creating an exception for employers who negligently infect their employee’s family members with COVID-19.” Major events such as the COVID-19 pandemic have historically created new changes in employer safety obligations, from the Triangle Shirtwaist factory fire in 1911, which created new fire safety rules, to machine press injuries, which created new Occupational Safety and Health Act regulations, and, undoubtedly, to the recent pandemic.

Different public policy interests will compete. If employers become generally and widely liable for infectious illnesses caught at the workplace and transmitted elsewhere, the liability would be extensive and expensive. It may all come down to whether the employer fulfilled all of the federal, state, and local obligations and procedures put into place—issues that could create unending disputes of fact.

We have come a long way through this pandemic, but we are still in the midst of reconstituting and reengineering our workforces.

Mark I. Schickman is Editor of the California Employment Law Letter and the founder of Schickman Law in Berkeley, California. Mark has successfully litigated almost every type of employment case in the courts before juries and administrative agencies and on appeal and is a popular and engaging trainer providing employment advice to employers across the country. He can be reached at Mark@SchickmanLaw.com.

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