California—COVID-19 Wrongful Death Lawsuit Not Barred by Exclusive Remedy
On December 21, 2021, the California Court of Appeals, Second District, in See’s Candies, Inc. v. Superior Court of California for the County of Los Angeles, found that workers compensation (WC) exclusive remedy did not bar a COVID-19 wrongful death claim brought by an employee and her children against her employer for the death of the employee’s spouse from COVID-19.
In this case, the employee allegedly contracted COVID-19 at work and transmitted the illness to the spouse who died a month later. The employer argued that the lawsuit was barred by WC exclusive remedy under the derivative injury doctrine, which provides that workers compensation is the exclusive remedy against third-party claims deemed derivative of an employee’s injury.
Relying on the California Supreme Court decision of Snyder v. Michael’s Stores, Inc., the appellate court reasoned that a derivative injury is legally or logically dependent on the employee’s injury and not merely causally linked to it. The appellate court further noted that a derivative injury extends to nonemployee claims when their own losses relate to the employee’s injuries, such as in cases of an employee wrongful death, loss of consortium, or bystander emotional distress. The appellate court concluded that the derivative injury doctrine did not apply to the facts of this case because the employee and her children were not seeking damages arising from an injury suffered by the employee, but rather, damages arising from the death of the employee’s spouse.
NCCI will monitor future developments.
On December 22, 2021, the Supreme Court of Pennsylvania, in Lorino v. Workers’ Compensation Appeal Board, clarified when attorney fees should be awarded to prevailing claimants in cases where employers reasonably contest issues pursuant to section 440 of the Workers Compensation Act. The court held that section 440 gives discretion to a WC judge (WCJ) to enter an award of attorney fees in favor of a prevailing claimant even when the employer has a reasonable basis to contest the claim. With this decision, the court reversed a holding by the Commonwealth Court that attorney fees should always be awarded unless a reasonable basis for the employer’s contest has been established.
In its ruling, the court analyzed Section 440, which provides that, in any contested case, an employee who prevails shall be awarded reasonable attorney fees, but such fees may be excluded when the employer establishes a reasonable basis for contesting the claim. The court reasoned that the term “shall” establishes a mandatory duty, whereas the term “may” connotates an act that is permissive but not mandated. Thus, the court concluded, when a contested case is resolved in favor of an employee, an attorney fees award is mandatory.
However, the court added, when the employer establishes a reasonable basis for the contest, the WCJ is permitted, but not required, to exclude the attorney fee award.
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