Derivative Injury Rule Does Not Shield Employers From…

SPECIAL REPORT

By Sure Log

Generally, 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?

On Dec. 21, 2021, in See’s Candies, Inc. v. Superior Court of California for the County of Los Angeles, the 2nd District Court of Appeal held they were not.

FACTS OF THE CASE

In See’s Candies, 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 COURT’S DECISION

The Second District Court of Appeal upheld the trial court’s decision that the derivative injury rule did not bar the claim. The court relied on Snyder v. Michaels Stores, Inc. (1997) 62 CCC 1351.

In Snyder, the California Supreme Court held that immunity provided under workers’ compensation law “includes collateral or derivative losses to family members from employee injuries, but does not include logically independent claims by family members or other third parties.” Snyder involved a civil suit brought by a minor against her mother’s former employer and others. The minor alleged that she and her mother were exposed to toxic levels of carbon monoxide at the mother’s workplace while the minor was in utero, causing her to be born with cerebral palsy and other disabling conditions. Snyder concluded that because the minor did not claim any damages to the mother, and because her claim was not legally dependent on injuries suffered by the mother, the minor’s fetal injuries were not subject to workers’ compensation pre-emption.

In See’s Candies, the Court of Appeal similarly concluded that the plaintiffs’ claim was not barred by the derivative injury rule. It explained that third-party injuries are not subject to the derivative injury doctrine merely because they are caused by an employee’s injury. It found little difference between a mother breathing a poisonous gas and conveying it to her unborn child, and a wife breathing in viral particles that she then conveys to family members.

Quoting from Snyder, the Court of Appeal 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.

ANALYSIS OF THE DECISION

The Court of Appeal’s holding in See’s Candies is limited. It does not hold that employers will be liable for employees’ family member illnesses or deaths related to COVID-19. It holds only that the plaintiffs’ claims in that case were not barred by the WCA under the derivative injury rule.

The court was clear that it did not address whether the defendants even owed a duty of care to the plaintiffs, and specifically stated that this issue was “worthy of exploration.” It also did not address whether either the employee or the husband contracted COVID-19 because of any negligence in the workplace. Accordingly, the plaintiffs still must establish employer liability under tort law in order to recover.

There is no question, however, 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.

Whether the decision will result in what the court alluded to as a “never-ending chain of derivative injuries and unchecked liability” and extend liability beyond an employee’s household was not addressed. It’s likely, however, that any duty of care would be limited to those who are foreseeably in close and sustained contact with the worker over a significant period of time. (See Kesner v. Superior Court of Alameda County (2016) 81 CCC 1095.)

For further discussion of the derivative injury rule, see Sullivan on Comp Section 2.30 Civil Claim by Dependent and Other Third Party.