Stockwell, Harris, Woolverton & Helphrey
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March 2020

COVID-19 and California: Workers’ Compensation Liability

As the Novel Coronavirus disease (COVID-19) spreads rapidly into almost all communities in California, both individuals and businesses are determining next steps and the potential for employer liability if they fail to take necessary precautions to protect their employees from the consequences of the disease.  To appropriately assess the effect that the California workers’ compensation system may play into these key decisions, we need to consider both the definition of a compensable injury and case decisions over the years on whether infectious diseases previously considered nonoccupational can be considered compensable. 

California Statutory Liability and Case Law for Nonoccupational Diseases

Labor Code §3600(a)(3) provides for a compensable injury if it was sustained arising out of AND in the course of employment in those cases where the injury is proximately caused by the employment, either with or without negligence. A nonoccupational disease is “one that is not contracted solely because of an exposure to work or because it is related to a particular type of work. “ As a general rule, a nonoccupational disease does not arise out of employment. While a common cold and the flu are normally considered nonoccupational illnesses, highly contagious diseases, such as Valley Fever and tuberculosis, have been held to be compensable injuries where it has been determined that the employees’ risk of contracting these diseases from employment is medically probable or materially greater than the general public.  Unlike other nonoccupational diseases such as a cold or a seasonal flu, OSHA requires that an employee contracting the novel coronavirus at work is a recordable event.  

While the California workers’ compensation system sets a fairly high bar for conditions that are widespread and highly communicable, there are no categories of disease excluded from the system. However, there are conditions which must be met to prove compensability, which include that the employee actually contracted the disease; that the disease exposure came from the workplace, and not from the general community, and that the employment places the employee at a substantially greater risk of contracting the disease than the risk experienced by the general public. An injury resulting from a nonoccupational disease may be compensable if the employment subjects the employee to an increased risk compared to that of the general public or the immediate cause of the injury is an intervening human agency or instrumentality of employment. In short, if an injured worker can prove he contracted the disease and that he worked in close proximity to a co-worker who tested positive, the injured worker stands a good chance of prevailing on a workers’ compensation claim, absent evidence of alternative exposure to the disease from a family member, neighbor, et cetera. 

Health Care for the Prevention of Occupational Illnesses

Labor Code § 3208.05 provides that a compensable injury includes a reaction to or a side effect arising from health care provided by an employer to a health care worker which is intended to prevent the development or manifestation of any bloodborne disease, illness, syndrome, or condition recognized as occupationally incurred by OSHA, the CDC or other appropriate governmental entities. Further, in situations where an employer determines that an employee should be tested or treated as a condition of continued employment, and that employee develops an adverse reaction such as a related illness, disability or death, then it is probable that the coronavirus will be deemed compensable as emanating from an intervening human agency or instrumentality of employment. 

Burden of Proof to Determine Compensability of COVID-19 Injury

The applicant must establish that he/she has been subject to a special or materially greater risk of contracting the coronavirus than that of the general public. Labor Code § 3202.5 requires that the applicable standard of proof is a preponderance of the evidence. However, several cases have allowed recovery on the “preponderance of probabilities” when a place of work was attended by the injured worker where there is a higher proportionate risk of infection, such that the facilities of the employment contributed to the transmission of the disease. 

In jurisdictions allowing for workers’ compensation recovery for diseases, an injured worker must prove by a preponderance of the evidence that a fellow employee was identified as the source of contagion.  In places of employment with significant public contact such as health care, transportation, public entity offices, restaurants, medical facilities, etc., it stands to reason that the burden of the injured worker contracting COVD-19 through work would be easily proven.  Currently, both Kentucky and Washington have provided wage replacement benefits and medical treatment for employees diagnosed with COVID-19.  However, if a workers’ compensation claim involves a person quarantined due to possible contact with the coronavirus, but that person has no symptoms or diagnosis, that claim will likely be denied as there is no condition arising out of and in the course of employment.

Although we anticipate that many states will follow suit, in California, the issue of compensability will be fact-specific and determined on a case-by-case basis.  Historically, in the case of LaTourette v. WCAB, 17 Cal. 4th 644 (1998), the California Supreme Court discussed the non-compensability of non-occupational diseases, stating, “The fact that an employee contracts the disease while employed or becomes disabled from the natural progression of a non-industrial disease during employment will not establish the “causal connection” necessary to invoke compensation.  This case discussed, “the obvious problems of determining causation considering the invisible and often widespread viral, bacterial, or other pathological organisms,” coupled with “the high cost of avoidance and treatment.”  However, this case recognized two principal exceptions to the general rule, which include “whether the employment subjected the employee to an increased risk compared to that of the general public, and whether the immediate cause of the injury is an intervening human agency or instrumentality of the employment.” See also Bethlehem Steel Company v. IAC (1943) 21 Cal.2d 742; Pacific Employers Ins. Co. v. Industrial Acc. Com. (1942) 19 Cal.2d 622. Accordingly, if the employee can demonstrate he had a greater risk of exposure at the workplace compared to the general public, which can be demonstrated by required travel to an outbreak location or a higher percentage of coronavirus cases in the workplace than that of the general community, the employer could be found liable for the injury. 

With reference to the second exception, causation as being an intervening human agency or instrumentality of the employment, in the case of the Maher v. WCAB, 33 Cal. 3rd 729 (1983), a nurses’ assistant was required by her employer to undergo testing for tuberculosis and, after testing positive, she was required to undergo treatment as a condition of continued employment.  During the treatment, she developed a significant adverse reaction.  The California Supreme Court found that the employer required medical treatment for a non-occupational disease arising out of the employment a compensable injury.  This exception is probably not analogous to the transmission of COVID-19 by contagion. However, it does demonstrate circumstances where exposure in the workplace is deemed compensable.

Employers are certainly advised to take appropriate action to protect employees and to ensure that employees who are infected or potentially infected do not aggravate their conditions at work, or cause additional contagion at work.  We anticipate a number of claims will be filed by injured workers contracting COVID-19, although there will certainly be defenses available to defeat industrial causation, and those claims will be handled on a case-by-case basis, given their own unique set of facts and circumstances.

Claims staff should consider asking claimants the following questions in their initial contact: has the employee’s diagnosis of COVID-19 been confirmed by an accredited test facility (if not, he should be directed to an appropriate testing facility); has the employee had contact with a person known to be infected with the coronavirus and if so, when and where did that contact occur; has the employee or any member of his immediate family recently traveled to China, Italy or any other country with significant exposure and if so, why; was the employee wearing personal protective equipment and, if so, did the employer provide it and was the employee provided with training as to the proper removal and disposal of the equipment, etc.

In those cases were the coronavirus is accepted or ultimately found compensable by the courts/WCAB, it is hoped that those cases will involve short term treatment and periods of temporary total disability without complications or permanent disability. However, the more severe cases can result in death and the applicable causation standard of proof in those cases will be whether the workplace exposure to the coronavirus merely contributed to the employee’s death.  

Assessing Workplace Risk Factors for the Coronavirus

OSHA has published “Guidance on Preparing Workplaces for COVID-19”.  OSHA has categorized workplaces and work operations into four risk zones based on likelihood of employee occupational exposure to the coronavirus. The exposure risk is categorized as very high, high, medium or low. The highest exposure risk is to healthcare employees and laboratory personnel while the lowest exposure risk is to employees having minimal occupational contact with the general public and other coworkers such as office employees. To reiterate, whether there has been a special exposure exception is dependent on its particular facts. Again, the above inquiries must be made on all claims of COVID-19 to preserve all potential defenses to compensability bearing in mind all potential compensability presumptions for certain classes of workers provided under the California Labor Code such as firefighters, peace officers, health care workers, correctional officers, etc.

Duty to Provide Diagnosed Employee with Claim Form

Labor Code § 5401(a) provides that a claim form must be provided “Within one working day of receiving notice or knowledge or an injury which results in lost time beyond the employee’s work shift at the time of injury or which results in medical treatment beyond first aid.” The duty arises when the employer actually knows of an injury or claim and the employee must ask for the claim form or tell the employer he/she has tested positive for COVID-19 and that he/she believes it was contracted on an industrial basis. Knowledge of the injury or claim cam come from any source and if the employer receives a medical report or any other information documenting that the employee contracted the coronavirus at work, that triggers the duty to provide the claim form.

Labor Code § 3208.1 requires that an injury must cause disability or the need for medical treatment to be compensable and employers are not required to provide workers’ compensation benefits to an employee who is sent home during a quarantine period due to potential exposure without a confirmed diagnosis. 

The Provision of CA Employment Development Department Benefits

Employees who are unable to work due to actually having (confirmed by a medical professional) or being exposed to COVID-19 can file a Disability Insurance Claim. Employees who are unable to work to care for an ill or quarantined family member (confirmed by a medical professional) can file a claim for Paid Family Leave. If an employer had reduced hours or shut down operations due to COVID-19, an employee can file for Unemployment Insurance benefits. 

For other benefits to employees and employers affected by COVID-19, the EDD website is:

https://www.edd.ca.gov/about_edd/coronvirus-2019.htm

CA Employees Using Paid Sick Leave due to COVID-19

If an employee has paid sick leave available, the employer must provide such leave and compensate the employee under California paid sick leave laws. Paid sick leave can be used for absences due to illness, the diagnosis, care or treatment of the health condition or preventive care for the employee or the employee’s family member. An employer may not require that the worker use paid sick leave, however. If an employee does not qualify to use paid sick leave or has exhausted sick leave, the employee may take vacation or paid time off if available.  

H.R. 6201: “Families First Coronavirus Response Act” – Signed 3/18/20 – effective 15 days after enactment until the end of 2020

Paid FMLA and paid sick leave provisions apply only to private employers with fewer than 500 employees and certain public employers. Employees have the right to take up to 12 weeks of job-protected leave under the FMLA; 10 of these 12 weeks must be paid at no less than two-thirds of the employee’s usual rate of pay with a cap of $200 per day and $10,000 in the aggregate.

The Act amends the FMLA to allow an employee who is unable to work or telework to take leave due to a need to care for the employee’s minor child if the child’s school or place of care has been closed or the childcare provider is unavailable due to a public health emergency with respect to COVID-19. 

The Act also adds a paid sick obligation to include 80 hours of paid sick leave for full-time employees for the following reasons: the employee is subject to a federal, state or local quarantine or isolation order related to COVID-19; the employee has been advised by a healthcare provider to self-quarantine; the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis; the employee is caring for an individual who is subject to an order described above or has been advised as described above; the employee is caring for their child if the school or place of care has been closed or the childcare provider is unavailable or if the employee is experiencing any other substantially similar condition specified by the Secretary of HHS in consultation with the Secretary of the Treasury and the Secretary of Labor.  

DISCLAIMER: This memorandum is for informational purposes only based on information available as of April 3, 2020 and should not be construed as providing legal advice relating to any particular claim case.   

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