COVID-19 and the Exclusive Remedy Rule

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An injured employee usually cannot sue the employer in civil court. Generally, when the conditions of compensation set forth in LC 3600 concur, the sole and exclusive remedy of the employee and his or her dependents against the employer is the workers' compensation system (LC 3602(a)).

The purpose of the exclusive remedy rule is to protect the employer from unlimited liability for the industrial injuries of its employees –– to protect the employer's side of the compensation bargain. Under the compensation bargain, the employer assumes liability for industrial personal injury or death without regard to fault in exchange for limitations on the amount of that liability. The employee is given relatively swift and certain payment of benefits to cure or relieve the effects of industrial injury without having to prove fault but, in exchange, gives up the wider range of damages potentially available in tort.

The rule is the same when an employee is injured or dies as a result of a COVID-19-related illness. Employee may pursue a workers' compensation claim against an employer but generally cannot sue the employer in civil court. This means an employee is limited to benefits available in the workers' compensation system: (1) medical care; (2) temporary disability; (3) permanent disability; (4) money for retraining; and (5) death benefits in the event of death.

Even if an employee is covered by a presumption that the COVID-19-related illness or death arises out of and in the course of the employment, the employee will only be entitled to regular workers' compensation benefits although any paid sick leave benefits specifically available in response to COVID-19 must be used and exhausted before any temporary disability benefits are due and payable (LC 3212.87(c), LC 3212.88(c).) The employee is not entitled to expenses not normally covered by workers' compensation such as expenses related to a self-quarantine or mandatory quarantine or expenses for the purchase of personal protective equipment (PPE).

Derivative Injury Rule

The exclusive remedy doctrine bars not only civil claims against an employer by an injured worker but also extends to claims brought by all others that are collateral to or derivative of the employee's injury. This is known as the derivative injury rule and is supported by the Labor Code.

Pursuant to LC 3600(a), compensation under the workers' compensation system is provided "in lieu of any other liability whatsoever to any person" (emphasis added). Moreover, LC 3602(a) states, "Where the conditions of compensation set forth in Section 3600 concur, the right to recover compensation is ... the sole and exclusive remedy of the employee or his or her dependents against the employer" (emphasis added).

Accordingly, dependents and other persons cannot bring civil claims that are derivative of an employee's work-related injuries. For example, family members cannot bring civil claims for intentional infliction of emotional distress, loss of consortium or wrongful death that are based on the injury or death of an employee. Only workers' compensation benefits are payable to the injured worker; death benefits are payable to the dependents in the event of a worker's death.

Because of the COVID-19 pandemic, however, this issue has resurfaced. Although many workers were required to stay at home during the pandemic, essential and frontline workers were permitted, if not required, to continue working. The Legislature recognized that the burden of fighting COVID-19 fell disproportionately on the group of people who continued to work during the pandemic, so it enacted presumptions allowing such workers to more quickly prove and receive benefits for an illness related to COVID-19.

But the risk of COVID-19 infection was not increased only for essential and frontline workers –– it was also increased for their family members. Employees who continued to work during the pandemic inevitably increased the risk of exposure for family members when they returned home. Family members are not covered by the Workers' Compensation Act (WCA) because they are not employees. But are they also precluded from bringing civil claims under the derivative injury rule?

Derivative Injury Rule Does Not Apply to Claims for COVID-19-related Illness to Family Members

On Dec. 21, 2021, in See's Candies, Inc. v. Superior Court of California for the County of Los Angeles, the Second District Court of Appeal held the derivative injury rule does not apply to legally independent claims for COVID-19-related illnesses to family members. In that case, an employee alleged that she continued working during the pandemic without appropriate and necessary social distancing. The employee became infected with COVID-19 along with other co-workers.

She was unable to work and stayed home with her husband and daughter, who provided care for her. Within a few days, both the husband and the daughter became sick with COVID-19. After struggling with the illness, the husband died. The employee and her daughter (plaintiffs) brought a civil action against the employer seeking damages for the wrongful death of the husband. The defendant asserted that the plaintiffs' claims were pre-empted by the WCA under the derivative injury rule.

The Second District Court of Appeal explained that third-party injuries are not subject to the derivative injury doctrine merely because they are caused by an employee's injury. It stated, "Neither the statutory language nor the case law ... remotely suggests that third parties who, because of a business’s negligence, suffer injuries –– logically and legally independent of any employee’s injuries –– have conceded their common law rights of action as part of the societal ‘compensation bargain.’” It found that the plaintiffs were not seeking damages arising from a disabling or lethal injury to an employee, but were suing for damages arising from the husband's death, which allegedly was related causally to the employee's alleged infection in the workplace.

The court was clear, however, that it did not address whether defendants owed a duty of care to nonemployees infected with COVID-19 as a result of an employee contracting the disease. It added that its analysis of issues of causation and derivative injuries was limited to interpretation of the workers' compensation act and was not intended to apply more generally to principles of civil litigation.

The Court of Appeal's holding in See's Candies is limited. It holds only that the plaintiffs' claims in that case were not barred by the WCA under the derivative injury rule. The plaintiffs still must establish employer liability under tort law in order to recover. So, while here is no question that See's Candies opens the door for more lawsuits against employers for illnesses or deaths related to COVID-19 contracted by family members of employees, whether employers will be liable no doubt will depend on the facts of each case.

See Also

• When Is COVID-19 Work Related?
• COVID-19 Presumptions

References

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