California Employers Can Face Lawsuits by Third Parties Claiming Injuries From Employees Infected With COVID-19

California employers whose employees become infected with COVID-19 while in the workplace and pass the infection to family members can be sued in civil court for resulting injuries suffered by third parties.

A California appellate court has ruled in the matter of See's Candies, Inc., et al. v. Superior Court of Los Angeles (Matilde Ek, et al.) that a wrongful death suit on behalf of a non-employee who allegedly contracted COVID-19 from an employee may proceed. According to the complaint, a group of employees allegedly became infected with COVID-19 in the employer's candy factory due to a lack of social distancing, and one of those employees passed the virus to her non-employee spouse. The employee later recovered, but the non-employee spouse died.

See's Candies argued that the case was preempted under the "derivative injury doctrine," which generally prevents lawsuits by third parties for injuries that are "collateral to or derivative of" injuries covered by California's Workers' Compensation Act. The court rejected that argument, ruling that third parties who suffer injuries "logically and legally independent of any employee's injuries" as a result of a company's negligence have not lost their right to sue.

Unlike typical derivative claims such as loss of companionship or trauma caused by observing an employee's suffering, the suit here was limited to damages arising from the non-employee spouse's death. While it may be causally related to the employee's original injury, it was not derivative of that injury and consequently was not preempted, the court said.

Possible Defenses

It is important to understand the ruling in context. The trial court dismissed the case before any discovery occurred. In other words, the appellate court simply held that the injured non-employee may be able to make a claim.

It may be difficult for litigants to prove that the virus was spread to the third party by way of the workplace and/or the employee or that the employer failed to have adequate safety protocols. Further, other intervening factors could have prevented the illness. Also, while California workers' compensation law includes a presumption that an employee's virus was contracted in the workplace, it is an open question whether the presumption applies in a lawsuit by a third party.

Best Practices

Regardless of who ultimately prevails, lawsuits are costly. Employers are wise to protect themselves by announcing and adhering to prevailing COVID-19 protocols. It is especially important to ensure that proper information and guidance is followed in response to any workplace COVID-19 case.

Employers may want to consider including guidance on family member safety as part of their plan to help reduce the spread of COVID-19—and, if need be, to show that the employer made every effort to protect its employees and their family members. Finally, employers should consult with their insurance broker or company to assess coverage options.

The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.

DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.