As employees begin returning to work over the coming weeks, employers will face unique challenges created by the risk of workplace exposure to the coronavirus. These risks take on an added urgency in a number of states where workers’ compensation coverage may not create an absolute bar to lawsuits related to workplace exposure to COVID-19. In fact, such lawsuits have already commenced with the April 6, 2020 filing of Toney Evans v. Walmart, Inc., et al., No. 2020-L-003938 in Cook County, Illinois. This first lawsuit has many employers – quite rightly – worried about whether the tort immunity typically provided by workers’ compensation laws will protect them given the unique nature of the COVID-19 pandemic. The best response to mitigate this risk will be to conduct a comprehensive review of workplace health and safety practices to help minimize the risk of workplace transmission of COVID-19 while carefully evaluating additional ways to limit exposure as government restrictions subside.
Workers’ compensation coverage does not necessarily bar lawsuits filed by employees alleging damages arising from workplace exposure to COVID-19.
Typically, when an employee experiences a work-related injury, the employee pursues a claim under the state’s workers’ compensation system. Although, the particulars differ in each state, workers’ compensation essentially guarantees the employee (or their estate) compensation for the workplace injury. In exchange for that guarantee, the workers’ compensation laws usually prevent the employee from suing their employer for compensation based on the workplace injury.
The preclusive effect of workers’ compensation is often referred to as the “workers’ compensation bar” or “exclusivity bar” since workers’ compensation is generally the employee’s exclusive source of recovery for a workplace injury. Each state has its own unique exceptions to the exclusivity bar, however, that permit the employee (or the estate) to pursue a claim for damages directly against the employer despite the existence of workers’ compensation coverage.
Triggering an exception generally requires the plaintiff to show the employer was more than just negligent. For example, in Illinois, an employee can avoid the exclusivity bar by proving the employer engaged in “willful and wanton misconduct.” Anticipating how courts will apply that standard is a challenge right now given the myriad and constantly changing preventative measures recommended by the Centers for Disease Control and Prevention (CDC) and the Occupational Safety and Health Administration (OSHA) – such as requiring social distancing, providing personal protective equipment (PPE) and more frequent sterilizations and store cleanings.
The following are examples of some of the state-specific exceptions to the workers’ compensation bar in action:
- Intentional or deliberate acts by an employer
In New York, an injured employee may avoid the workers’ compensation bar if the employee can show “an intentional or deliberate act by the employer directed at causing harm to this particular employee.” Pereira v. St. Joseph’s Cemetery, 864 N.Y.S.2d 491, 492 (N.Y. App. Div. 2008). To avoid the workers’ compensation bar in New Jersey, a plaintiff must establish: (1) the employer knowingly exposed the employee to a substantial certainty of injury; and (2) the resulting injury must not be “a fact of life of industrial employment,” and must be “plainly beyond anything the legislature intended the Act to immunize.” Bove v. AkPharma Inc., 213 A.3d 948, 958 (N.J. Super. Ct. App. Div. 2019). Failing to follow proper workplace safeguards under federal and state recommended guidelines may permit employees in jurisdictions like New York and New Jersey to avoid the exclusivity bar that workers’ compensation coverage otherwise would provide.
- Acts that fall outside the risks encompassed within the compensation bargain
In California, an employer may be liable for an intentional act that is not “a normal part of the employment relationship, or workers’ compensation claims process,” or where the motive behind the act violates a fundamental policy of California. Light v. Dep’t of Parks and Recreation, 221 Cal. Rptr. 3d 668, 686 (Cal. Ct. App. 2017) (finding claims of intentional infliction of emotional distress based on an employer’s unlawful discrimination and retaliation are not subject to workers’ compensation exclusivity). “When an employer steps outside of its proper role or engages in conduct unrelated to the employment,” its conduct falls outside the workers’ compensation scheme. Lee v. W. Kern Water Dist., 210 Cal. Rptr. 3d 362, 379 (Cal. Ct. App. 2016); see also Gantt v. Sentry Ins., 824 P.2d 680, 691 (Cal. 1992) overruled on other grounds by Green v. Ralee Eng’g Co., 19 Cal. 4th 66, 960 P.2d 1046 (Cal. 1998) (finding an employer’s decision to discharge an employee based on an animus that violated the fundamental policy of California was not a “normal part of the employment relationship”). Again, how courts may interpret this and similar standards in light of the unprecedented nature of COVID-19 is difficult to predict.
- Workers’ compensation payments waived by employees
In Massachusetts, an employee may notify their employer in writing, at the time of hire, that they do not waive the common-law rights of action and instead waive any compensation payments under the Workers’ Compensation Act. Estate of Moulton v. Puopolo, 5 N.E. 3d 908, 915 (Mass. 2014); see also Texas Labor Code section 406.034 (allowing employees to opt out of workers’ compensation). Thus, employers who provide workers’ compensation coverage to their employees, in states that allow employees to elect to retain their common law rights, may find themselves potentially liable if an employee contracts COVID-19 while at work.
- Non-compensable injuries under workers’ compensation schemes
Some states ultimately may decide that illness due to COVID-19 is not compensable under their workers’ compensation law. Such a finding could result in employers losing the workers’ compensation exclusivity defense. In Texas, for example, an injury not compensable under workers’ compensation law is also not subject to the exclusivity bar. See GTE Southwest, Inc. v. Bruce, 998 S.W.2d 605, 611 (Tex. 1999) (pure psychic injury not compensable, and therefore employees’ tort claims not barred). Thus, a “no coverage” determination for COVID-19 injuries could result in potential employer liability under tort causes of action. Plaintiffs will still have to establish causation and show they did in fact catch COVID-19 from their workplace, but they will be able to access the courts and impose litigation costs.
In the coming months, courts will grapple with: (1) how to define an employer’s duty to prevent the spread of COVID-19 in the workplace; (2) how to determine if an employer violates that duty; (3) how employees can prove they contracted COVID-19 while at work or working; and (4) whether workers’ compensation statutes prohibit these types of lawsuits. The unprecedented nature of COVID-19 makes answering these questions difficult. See, e.g., Guess v. Sharp Mfg. Co. of Am., 114 S.W.3d 480, 487 (Tenn. 2003) (holding an employee may have been able to recover workers’ compensation benefits for a mental injury due to exposure to HIV had the employee demonstrated actual exposure to the virus while working). Employers therefore should review and evaluate their workplace safety measures to minimize the risk of workplace spread of COVID-19.
You can find a non-exhaustive list of suggested measures to minimize the risk of workplace exposure in our prior coverage on this topic here. Information distributed by governmental agencies such as the CDC and OSHA also should be frequently reviewed.
As always, please contact Reed Smith’s employment attorneys for guidance and assistance in developing workplace safety plans and procedures to help minimize the spread of COVID-19 to employees, customers and visitors of your business. Reed Smith’s employment team can work with you to audit your business and develop measures aimed at minimizing these risks while maximizing your operational flexibility.