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Does the “exclusive remedy rule” apply to COVID claims?

Does the “exclusive remedy rule” apply to COVID claims?

Court of Appeal to address whether the “exclusive remedy rule” applies to COVID claims.

California’s Second District Court of Appeal is considering the case of Matilde Ek et al. v. See’s Candies Inc. et al., which challenges whether the “the exclusive remedy rule” applies to COVID claims. As the amicus brief filed by a robust coalition of employer-backed groups points out, “The trial court’s ruling, if sustained, could subject employers across the state to potentially unlimited tort liability for alleged workplace injuries that the Legislature intended to be addressed in the workers’ compensation system. Given that prospect, the potential impact of this Court’s decision in this writ proceeding can hardly be overstated.”

The Facts: Employee as vector of COVID to non-employee family members.

Matilde Ek allegedly contracted COVID while working at See’s Candies assembly and packaging line. She claims that appropriate social distancing measures were not implemented. While convalescing at home, Matilde Ek’s husband then contracted and later died from COVID. The wrongful death lawsuit alleges general negligence and premises liability, and claims that “Defendants failed to operate and conduct their business as would and should be expected to protect their employees, including plaintiff, from the known high risk of this viral infection by failing to put known, appropriate and necessary safety mitigation measures in place.”

See’s moved to dismiss the Complaint, arguing that because Mr. Ek’s illness and death derived directly from his wife’s workplace illness, Workers’ Compensation is the family’s exclusive remedy for this derivative claim. Los Angeles Superior Court Judge Daniel M. Crowley overruled the motion to dismiss, and See’s appealed that decision.

What is a derivative injury?

This state’s Supreme Court has held that: “[T]he derivative injury rule governs cases in which ‘the third party cause of action [is] derivative of the employee injury in the purest sense: It simply would not have existed in the absence of injury to the employee. (Snyder v. Michael’s Stores, Inc. (1997) 16 Cal.4th 991, at p. 998) In other words, “the rule applies when the plaintiff, in order to state a cause of action, must allege injury to another person—the employee.” (Ibid.)

Why is this rule so significant?

The derivative injury rule establishes workers’ compensation as the exclusive remedy for all claims that are derivative of an employee’s workplace injury. In enacting the Workers’ Compensation Act, the Legislature struck an important balance: It allowed employees to recover for workplace injuries under a strict liability regime but protected employers from facing excessive liability in the civil litigation system by establishing workers’ compensation as the exclusive remedy for all workplace injury claims. Defendant See’s believes the trial court disrupted this delicate balance by “inventing a COVID exception” for injuries that derive from employees who allegedly contract the virus in the employer’s workspace and then infect non-employee family members.

The Issue:

The issue being tried is whether the injury to the non-employee husband was derived from his employee wife’s workplace injury. If the husband’s contracting COVID was derivative of his wife’s workplace injury then the exclusive remedy provisions of California’s Workers’ Compensation Act will apply. However, if the appeals court follows the ruling of the trial court, and the husband’s injury is found to be his own injury, i.e. not derived from his wife’s industrial injury, then plaintiffs may proceed in their civil tort action against See’s.

See’s argues that because plaintiffs’ claims would not exist in the absence of the employee’s workplace injury, they must therefore proceed, if at all, under the workers’ compensation system.

Plaintiffs concede that Ms. Ek was injured, i.e. did contract COVID, allegedly at her workplace, but point out that they are not pursuing any workplace injury for Ms. Ek. Plaintiffs contend that it is not necessary for them to pursue the industrial claim for Ms. Ek, instead arguing that Ms. Ek merely acted as a “vector” which linked See’s Candies’ negligence to her husband’s death.

Why did the trial court overrule See’s demurrer?

In overruling See’s demurrer the trial court cited two California Supreme Court cases in which family members sustained their own independent injuries as a result of being exposed to a toxin in a related employee’s workspace.

In Kesner v. Superior Court (2016) 1 Cal.5th 1132, the Court found an employer liable for an injury claimed by family members of employees exposed to asbestos in the work place. The family members sustained their own, non-derivative injuries from exposure to the asbestos fibers carried home by the employed individuals, such as on their work clothes.

Similarly, in Snyder v. Michael’s Stores, Inc. (1997) 16 Cal.4th 991, the Court found that injuries sustained by a fetus in utero while its mother was acting in the course of her employment were not derivative of its mother’s injuries. In Snyder, both the pregnant mother and her fetus suffered injuries after being exposed to hazardous levels of carbon monoxide at the workplace. The Court in Snyder made clear that the baby’s injuries were her own and not derived from her mother’s.

As the trial court noted, “In sum, both the family members in Kesner and the baby in Snyder sustained their own independent injuries as a result of their being exposed to a toxin in a related employee’s workspace.”

What is See’s Arguing?

In their reply brief, See’s makes the argument that there is no “Employee Vector” exception to the derivative injury rule. However, they may struggle to distinguish the instant case from the Supreme Court cases cited above. See’s notes that, “…unlike the present case, Kesner did not involve any workplace injury to the employee, and so the decision did not even address workers’ compensation exclusivity or the derivative injury rule at all. Here, Ms. Ek did suffer an injury and that injury is the causal link in Plaintiffs’ claims. The derivative injury rule therefore applies.”

In making this argument See’s will likely have to contend with a couple questions. First, although it may be true that Kesner did not address the derivative injury rule, or any workplace injury, this was due to the fact that the employee, with asbestos-contaminated clothing, was understood to be acting as an uninjured vector. Just the same, plaintiffs in the instant case do not necessarily have to allege that Ms. Ek suffered any workplace injury. Indeed, even if Ms. Ek were an asymptomatic carrier of COVID, like the uninjured asbestos employee in Kesner, the outcome would have been just the same—her husband would have contracted COVID by way of his wife acting as a conduit allegedly due to the negligence of See’s.

Further, See’s will likely have to address Snyder, where the pregnant mother, also acting as a vector, did herself suffer an actual industrial injury and the court nevertheless ruled the same. That is, neither the employee mother’s own industrial injury allegedly from the workplace exposure, nor her role as vector between the defendant’s alleged negligence and the baby’s own, independent injuries compelled application of the rule.

Why did the court rule this way?

As plaintiffs point out, in Snyder it was the baby whose actual injuries – and not those of the employee mother – were being sued upon by plaintiffs. See’s will have to address why that very same reasoning shouldn’t apply here.

Some employers are concerned that an adverse decision by the Court of Appeal could be the beginning of the end of the derivative injury rule, exposing employers to many COVID derivative injury lawsuits filed by their employees’ household members.

Oral Arguments commenced on 11/16/2021. Check back for updates regarding the appellate court’s ruling!



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