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INSIGHT: Workers’ Comp May Protect Employers From Virus Claims

June 22, 2020, 8:00 AM

As more states relax restrictions on businesses and citizens relating to the Covid-19 pandemic, employers are increasingly turning an eye to potential liabilities connected to reopening.

In particular, many businesses fear a deluge of employee lawsuits alleging that unsafe workplaces led them to contract Covid-19—to the point that Congress is considering various proposals to provide immunity from Covid-related lawsuits, including (in the words of Senate Majority Leader McConnell) protections so that “employers … know if they follow the guidelines, they will not be left to drown in opportunistic litigation.”

But in reality, most employers engaging in good-faith efforts to follow the CDC’s guidelines for safely reopening already have legal protections available to them. The workers’ compensation system, which handles workplace-related illnesses and injuries, is already adequate to insulate most employers from suit unless they deliberately endanger their workers.

System Works for Both Parties

As a general rule, when an employee is injured on the job, his or her employer’s liability is limited through the workers’ compensation system. This system works for both parties: the employee need not show that the employer breached a duty of care, but damages are limited.

The vast majority of employers carry workers’ compensation insurance, ensuring that employees can be compensated for workplace injuries without putting employers at undue risk of huge liabilities or even bankruptcy arising from individual claims. This same framework applies to work-related illnesses, though typically diseases that are not readily traceable to specific work activities or environmental conditions in the workplace are instead categorized as “ordinary diseases of life” and are not compensable.

Covid-19 does pose challenges to relying on this familiar framework. As a highly infectious disease, once it has been introduced to a workplace, co-workers may contract it on the job. And unavoidably working in proximity with others may increase the risk of transmission, both for essential workers exempted from stay-at-home orders and for nonessential workers now returning to the job. But unlike more common occupational diseases, there will frequently be no specific work activity that can be shown to cause Covid-19.

State Positions on Workers’ Comp and Covid-19

Several states have staked out clear positions on the interaction between workers’ compensation regimes and work-related Covid-19 cases. In California, for instance, Gov. Gavin Newsom (D) issued an executive order creating a rebuttable presumption that any employee’s Covid-19-related illness arose out of employment for purposes of workers’ compensation so long as they were diagnosed within fourteen days of attending their workplaces after March 19.

Many more have proposed legislation establishing similar presumptions that Covid-19 cases were occupational for certain classes of workers. In Massachusetts, for instance, Bill H.4749, referred to committee, would make a Covid-19 diagnosis for medical personnel into prima facie evidence of eligibility for workers’ compensation.

In Ohio, House Bill 573, pending in committee, goes even further by adding Covid-19 to the state’s statutory list of occupational diseases as to cases contracted during the declared state of emergency.

Because Covid-19 may be contracted within or outside the workplace, the states will need to consider what proof is required to demonstrate occupational contraction of Covid-19. Ohio’s Bureau of Workers’ Compensation states that whether an employee who contracts Covid-19 is eligible for workers’ compensation “depends” on how the disease was contracted and the nature of the employee’s occupation and that “[g]enerally” a claim arising from contracting Covid-19 is not compensable. However, as of April 17, the Bureau had approved several Covid-19 related claims.

State Exceptions Range Widely

Even though most states appear to consider work-related Covid-19 cases as eligible for workers’ compensation, each state has its own exceptions that authorize tort suits outside of the workers’ compensation system. These exceptions run the gamut: in New York, for instance, an employee must show “an intentional or deliberate act by the employer directed at causing harm to this particular employee” in order to avoid the workers’ compensation bar.

In California, an employee may sidestep workers’ compensation in favor of tort litigation where “the employee’s injury is aggravated by the employer’s fraudulent concealment of the existence of the injury and its connection with the employment.” Maryland requires “actual, specific, and deliberate intent to injure the employee” and maintains the workers’ compensation bar even for willful, wanton, or reckless conduct. Ohio excepts torts committed with deliberate intent.

The common thread in these exceptions is some form of intentional or deliberate act by an employer that, in the view of the state legislatures, should be deterred by allowing the employee to sue at common law for occupational injuries rather than through workers’ compensation.

In the end, although many specific questions depend on an individual state’s law, it appears that state workers’ compensation laws generally acknowledge or tacitly entertain that Covid-19 illnesses contracted in the workplace may qualify for workers’ compensation under current law.

Many states are inching toward presumptions intended to save employees the burden of proving that they encountered the virus at work rather than somewhere else, but until these become law it will remain incumbent on the employee to prove causation, such as through demonstration of a cluster of workplace cases in an area that is otherwise modestly impacted.

Though the allocation of the burden of proof may vary from state to state, it appears that state workers’ compensation laws will generally apply to claims of employees who allege they contracted Covid-19 in the workplace, such that tort litigation against employers is barred even without congressional intervention, so long as they take reasonable steps to protect their employees.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Mark Raffman is a partner at Goodwin who concentrates his practice on complex product liability and consumer products litigation and advice. He advises on regulatory compliance audits and legislation as well as transactions posing liability and other risks associated with the merging of wired technology and the physical world and the Covid-19 pandemic.

Stephen Shaw is an associate in Goodwin’s Consumer Financial Services Litigation practice.