The State of the COVID-19 Crisis in California

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PANDEMIC

“Who speaks of victory? To endure is all."

      ––	Rainer Maria Rilke

Today and in the coming weeks, Californians –– employers, their insurers and every resident –– are faced with one of the greatest challenges in our history.

As with all great calamities, the hardest part is dealing with the unknown. Without expertise, we are required to fathom and predict the course of a little-understood disease in order to make business and employment decisions at a local level. The same understanding and predicting is required at the state, national and global levels. We gain insight only incrementally, requiring daily revision of action and deepening of thought. Still, there's no promise of correct judgment. We do our best; knowing as much we can about what is going to happen makes planning possible.

We must plan while experts themselves disagree, clumsily gaining knowledge in fits and starts. Experts don't even know if aerosol transmission of COVID-19 should be of concern. Data are scarce because this is a novel virus. Our understanding is hampered by shortages of testing equipment, variations in medical and reporting infrastructure in different countries, and by the political agendas of individuals and governments. The scientific understanding of this virus is immature. Unreliable and insufficient data are all we have.

Some businesses are shut down completely. Those lucky enough to be operating can’t even call a meeting in a normal fashion. Every day brings challenges that stretch our limits. And we don't know how long the challenges will last.

We care about and want to take care of our employees –– their physical and mental health, and their livelihoods. We want to protect and maintain the business that sustains them. Many people are on edge, watching the unemployment claims rise within weeks to the tens of millions, many of which belong to our own. People are scared and hungry for meaningful leadership –– they're looking for answers and guidance.

Novel legal challenges pile on. For many of us who have had to impose layoffs, the specter of increased claims lurks for practitioners of both workers' compensation and employment law. Historically, layoffs are followed shortly by a wave of legal claims, and we're starting to see them now. People who have been working with and tolerating continuous trauma injuries have lost any incentive not to pursue a workers' compensation claim. Workers whose claims have been accepted might have renewed interest in them, and seek to realize value when the claims otherwise would end up administratively closed. Then there are the opportunists who emerge following a layoff –– people with questionable claims who prefer to be on disability than unemployment. Questions about sick leave, wage-and-hour requirements, the Family and Medical Leave Act and many other labor issues are not easily answered as a plethora of new legislation and emergency regulations emerge in an unprecedented rush. Extensive litigation seems inevitable.

Employers who have avoided layoffs and continue to operate are not necessarily in a better position. They, too, are required quickly to develop the legal expertise to stay out of trouble and to manage the trouble that inevitably develops. Gov. Gavin Newsom’s stay-at-home order of March 19, 2020 has us working in the closet, the garage ... whatever space affords us the privacy to do our jobs. Home is the workplace.

We all know our situation is grave. We really are in this together. Businesses with grit, business that can adapt and innovate, will survive. We hope this guide helps California employers and their insurers navigate the challenging and unfamiliar legal terrain. We will update this publication continually, as understanding of the situation improves, as crisis law develops, as innovative thinking maps a successful path through this complex problem.

Employers, insurers and employees can recover from the ravages of COVID-19. We can help.

WORKERS' COMPENSATION QUESTIONS

The implications for workers' compensation claims are vast. What happens when an injury arises in the home environment? Is a fall down the stairs now a compensable injury? What if it happens at night? What if it happens out in the yard, but during work hours? What was that called again –– oh yes, the personal comfort doctrine. Is the entire home a “zone of danger” while the stay-at-home order is in effect, or after it's lifted but while employees are still working from home? Is any claim of injury beyond first aid defensible?

What of the virus itself? Under what circumstances is catching it compensable? What's the status of the various legislative efforts to create presumptions regarding COVID-19? What if a family member is quarantined in the same home where an injured employee is required to work? Would the fact that he or she would have to go home even if he or she was working on-site serve as a defense? What's the standard of proof?

And what of the psychological claims that will inevitably develop around all of this? COVID-19 is stressful for everyone. Uncertainty abounds about the future of the national and global economies, about how long we must endure the virus, about how to restart the economy, about how to balance economic and public health needs. Massive uncertainty reigns in a polarized nation during an election year. The phenomenon lacks the hallmarks of an actual event of employment, but could it be a platform for the defense of psychological claims under the predominant causation requirement of the Labor Code? Is being sent home a personnel action?

If a claim is filed, what if it interacts with a co-morbidity, for example, heart problems? What if the co-morbidity itself is an industrial injury or condition? What if the virus in combination with a co-morbidity causes permanent problems? What if it causes death? If an employee is on modified duty, and gets laid off, is temporary disability appropriate? If it's not provided, is that an LC 132a violation? The implications for the obligation to provide benefits are myriad and complex.

What about process? When is an employer obligated to provide a claim form to a sick worker? How can an employer manage all the required letters when claims adjusters are working from home? Is there any functioning court system? As the Workers' Compensation Appeals Board seeks to adapt to stay-at-home practice, use of a popular call-in service is supplanted by the use of appeals board telephones. What can we expect from this alternative system? Early reports indicate that appearance is voluntary –– is there any legal authority for this to be otherwise? What are the immediate practical implications of the alternative process for existing bodies of litigated claims? What should employers and insurers do to innovate in this environment? What of depositions and qualified medical evaluator in-person exams? What’s working?

EMPLOYMENT AND LABOR ISSUES

California is well known as one of the most (if not the most) challenging states for employers to comply with the complex body of employment law. In this new era of COVID-19, employers will be tasked like never before to remain compliant in a minefield of liability traps.

What are an employer’s obligations to maintain a healthful workplace? What's the limit of inquiry into an employee’s health conditions as they relate to COVID-19? May physical exams, such as taking temperatures, be conducted in the workplace? Do these restrictions change when employees are teleworking?

With the onset of new and evolving federal/state/local laws mandating leave benefits to employees, businesses must decipher which, if not all, apply. How long must paid leave be provided (and at what rate) for employees affected by COVID-19? Are a company’s generous paid leave policies sufficient, or must it offer more? Does the employer pay the new benefits, or do government entities? What if the company cannot function if these employees are on leave? How do the Family and Medical Leave and California Family Rights acts interplay with the benefits bestowed by the new Families First Coronavirus Response Act? What about furloughed/laid off employees?

Federal and state discrimination, accommodation and retaliation laws similarly are implicated in new and complex ways. Is COVID-19 a disability for which an employer is required to make reasonable accommodations? Even if the disease is not an actual disability, what are the dangers of regarding or treating an employee as disabled because of COVID-19-related issues? May “at risk” employees be forced to telework to protect other employees? What new policies may be implemented without running afoul of race and age discrimination statutes? May new hires be screened and denied jobs if they test positive for COVID-19?

These are just a few within a universe of issues employers must understand and properly navigate to avoid costly liability exposure in California.

THE SITUATION

A Global Failure to Prepare

In 2015, Bill Gates (now) famously gave a Ted Talk expressing his vision for managing epidemics following the Ebola outbreak in western Africa that claimed 10,194 lives. He noted that “The problem wasn’t that there was a system that didn’t work well enough. The problem was that we didn’t have a system at all.” He noted some key missing pieces that inhibited effective intervention: There was no team of epidemiologists at the ready to see what the disease was and how it spread; no medical team at the ready; no infrastructure to prepare people to manage the outbreak. No one was there to review potential treatments, diagnostics or tools such as processed plasma from the blood of survivors. He said the lack of such epidemic management tools was a global failure, and noted that the World Health Organization is funded to monitor epidemics, but not to react to them.

Gates said that the world was spared of an Ebola pandemic because its transmission was not airborne, it did not progress into urban areas and the fact that by the time a person was contagious, he or she was sick enough to be bedridden. He warned, presciently, that should these factors change, we could be beset with a pandemic. World Bank estimates at the time projected that a worldwide flu pandemic would cause a global loss of wealth of $3 trillion and cost millions of lives. A model of the Spanish flu of 1918 in today's world projected more than 33 million deaths worldwide.

Perhaps, Gates said, the Ebola epidemic had a silver lining in that we now have the technology to build a robust response infrastructure. He urged people to treat Ebola as a wake-up call for the next epidemic, and suggested establishing tools for a global health system –– stronger health systems in poor countries where outbreaks are likely to emerge; a medical corps with the training and expertise to deploy in early stages of the outbreak; pairing of these personnel with the military; preparatory simulations; and stepped-up research and development of vaccines and diagnostics. The expected budget was minuscule relative to the potential harm.

A Current Look –– California

Enter 2020 and COVID-19. As stated above, the coronavirus response has been criticized for its shortage of testing equipment and significant imperfections in collecting and interpreting data. But even if the response has been insufficient the data we do have are not useless. The links in this subsection lead to a variety of resources of information.

Many people are familiar with Johns Hopkins University as an early leader in providing up-to-date information especially for numbers of confirmed cases and numbers of deaths. It also provides a more hopeful metric –– the number of people who recovered from COVID-19, organized by region. You select a country, and the data drills down to the state and county levels. The site is updated frequently during the day. Daily email updates are available if you want a written summary worldwide. A map is updated very close to real time.

The paucity of testing and the fact that many infected people are asymptomatic or nearly so (possibly as much as 50%) mean that the true number of cases probably is 5 to 50 times the number of confirmed cases. There is no way to know. Of course, the numbers will change as testing becomes more widespread.

California seems to be doing a fantastic job of flattening the curve. We benefited from becoming affected a bit later in the development of the disease, and from the growing awareness of what happened in China, Italy and New York. Relatively early stay-at-home orders in California (March 19, 2020) certainly had an important if unmeasurable contribution. Some observers were concerned that Californians were not anticipating what was going to happen, and might have been reluctant to accept the economic impact of a best-practice response. Mercifully, we stepped up.

A well-circulated blog on the importance of understanding exponential math might have contributed to public behavior that slowed the spread of the virus –– it's had more than 40 million views. A well-respected source of data for COVID-19 issues overall is found at Our World in Data.

On March 24, California had counted 2,628 confirmed cases of COVID-19. At the time, Gov. Newsom advised that the state would need 50,000 hospital beds to deal with coronavirus. By April 17, there were 28,392 confirmed cases of the disease. Be mindful that the virus can incubate for as long as 14 days, so any numbers represent a span of time during which the afflicted could have contracted the virus.

On April 8, an analysis argued persuasively that California had “bent the curve.” A later analysis by the same author concluded that the curve was bent in California, referencing hospital data in support, and discussing recommendations for careful emergence from staying at home. Peak usage of hospital beds was expected to occur on April 17, 2020 –– 2,004. It appears that a few more beds were in use on that date, but not many. Courtesy of continued social distancing, the number is expected to taper to zero coronavirus-related hospital bed usage on May 28, 2020. Even better news, estimates for May 11 are pegged at only 87 beds, per a model published by the Institute for Health Metrics and Evaluation (IHME), a University of Washington independent global health research center.

Happily, social distancing in California seems to have been much more effective than Gov. Newsom had predicted.

A Look Forward

Although California appears to be doing relatively well, the global pandemic endures. There are warnings about the food supply, especially in poor countries. The volatile stock market and horrific unemployment numbers remind us daily of the economic impact of coronavirus. California remains vulnerable, like everywhere else. Even if we resume limited economic activity, any flare-up could prove worse than the original local outbreak. We must remain vigilant and aware of the continuing threat.

On the morning of April 17, Johns Hopkins summarized the global numbers: "The WHO COVID-19 Situation Report for April 16 reports 1,991,562 confirmed cases (76,647 new) and 130,885 deaths (7,875 new). Assuming that the total reaches 2 million cases in this afternoon’s Situation Report, it will have taken 13 days to go from 1 million cases to 2 million. By comparison, it took 8 days to go from 500,000 cases to 1 million and 7 days to go from 250,000 cases to 500,000. On a global scale, the doubling time is slowing (at least in terms of reported cases), but the pandemic is still growing steadily. Notably, in the 13 days it took to double from 1 million to 2 million cases, the number of reported deaths increased 130% (from 56,986)."

By mid-afternoon of that report, 2,224,426 cases were reported globally.

No one knows how this will play out, and we have to live with that. Most experts emphasize that the behavior of individuals is largely what will determine the final metrics. California's success, to some extent, is the result of our ability to embrace the social behavioral changes necessary to stop the virus from spreading. We should be proud.

The good news is that private industry and philanthropists are coordinating efforts in groundbreaking ways. The Bill and Melinda Gates Foundation has given $250 million toward fighting coronavirus, including development of vaccines. Apple and Google have launched a joint effort to systematically track infections and warn people about exposure while promising to protect privacy. Here's a link to a cartoon explanation for computer laypersons that explains it well: https://ncase.me/contact-tracing/. What the best and the brightest have to offer is impressive.

Despite the enormity of the problem, despite the devastation wrought by the coronavirus, truly incredible and moments of humanity occur. Actor John Krasinski has assembled some of them in a quirky and fantastic ad hoc online "news" show, Some Good News. It's positive. It helps.

Here's our best on how to understand how California law relates to COVID-19.

INTRODUCTION

EMPLOYMENT AND LABOR LAW

WORKERS' COMPENSATION LAW

The State of the COVID-19 Crisis in California

From Navigating COVID-19

Contents