Matt Wickersham is a partner at Alston & Bird in Los Angeles in the firm's environment, land use and natural resources group. Photo: Courtesy Photo

Businesses in California and across the country have been economically decimated by the shelter-in-place orders established to mitigate the health impact from the COVID-19 virus. Now that more businesses are reopening despite persistent detections of COVID-19 throughout the state, we can expect to see more and more lawsuits alleging that operations at a business resulted in employees becoming infected and made sick by the COVID-19 virus. These lawsuits will undoubtedly allege that businesses failed to take sufficient precautions to address the risk posed by the coronavirus.

But while lawsuits are a certainty, liability is not. Any lawsuit seeking damages for COVID-19 injuries must surmount several procedural and substantive legal hurdles.

Workers' Compensation Is Generally the Exclusive Remedy for Occupational Injuries

In general, employees are entitled to compensation from the workers' compensation program if they can show that their injury was sustained at the workplace. For infectious diseases, especially those widespread in the general population, it will be difficult for employees to show that they contracted the disease as a consequence of their employment. California law (such as Labor Code Sections 3212.6, 3212.8 and 3212.9) has previously held that certain types of workers should be presumed to have sustained certain types of disease in the normal course of their employment. There are several bills pending in the legislature that propose establishing similar presumptions for other workers, such as first responders, health care workers and essential workers.

Gov. Gavin Newsom blew past these legislative proposals by mandating in an executive order that all employees who test positive for COVID-19 are presumed to have acquired the disease as an occupational disease if they worked at a jobsite outside their home at the direction of their employer between March 19 and July 5 and they tested positive for COVID-19 within 14 days of working at their jobsite.

While it's unclear whether this executive order will be extended, employees currently working within the state will be presumed to have incurred any coronavirus infection at the workplace for purposes of awarding workers' compensation benefits. While employers can rebut that presumption, that would be difficult to show without evidence that the worker has been acting carelessly outside of work, raising the prospect that employers must now monitor the activity of employees outside the workplace in order to respond to claims that an employee contracted COVID-19 at the workplace.

While Newsom's order drastically widened the scope of potential workers' compensation claims, it will limit the scope of broader legal liability for claims by employees. Claims for personal injury are typically barred if the alleged injury falls under workers' compensation. While there are exceptions to this exclusivity doctrine (for example, an employer may still be liable for aggravation of a disease, as opposed to concealment of the hazards of the employment that caused the employee to contract the disease), workers' compensation should be deemed the exclusive remedy for lawsuits brought by employees seeking damages because they were infected with COVID-19 as a result of their employment. This is a result of the "compensation bargain," where "the employer assumes liability for industrial personal injury or death without regard to fault in exchange for limitations on the amount of that liability. The employee is afforded relatively swift and certain payment of benefits to cure or relieve the effects of industrial injury without having to prove fault but, in exchange, gives up the wider range of damages potentially available in tort." (Charles J. Vacanti, M.D. v. State Comp. Ins. Fund, 24 Cal. 4th 800 (2001).)

The exclusivity provision of the workers' compensation regime will preclude the majority of lawsuits filed over COVID-19 infections. Expect to see many efforts by plaintiffs lawyers to circumvent this exclusivity provision. For example, vendors or customers may not be precluded from filing lawsuits claiming exposure at a workplace where they are not an employee. However, it will be difficult for transient visitors to prove that any infection was caused from a fleeting visit.

Plaintiffs lawyers will also likely argue that the exclusivity bar does not prevent lawsuits against parent companies that take direct action that aggravate an injury. However, this exception would have little practical effect if the operating subsidiaries have discretion to determine the necessary public health precautions that should be taken.

Instead, employees are increasingly bringing claims under the public nuisance doctrine. A claim for public nuisance is frequently used by neighboring properties to compel a facility to remediate or abate environmental contamination that is causing harm to the general public. Here, public nuisance should not be allowed to sidestep the exclusivity doctrine when the alleged harm to the plaintiffs is from occupational exposure to COVID-19.

Compliance With Governmental Regulations Is Generally a Defense to Lawsuits Based on Public Nuisance

Another significant defense to COVID-19 lawsuits will be an employer's compliance with applicable regulatory standards and guidelines. As discussed in the prior article from my colleagues Gregg Loubier and Sue Chang, state and local guidelines have established detailed schemes for when and how businesses may reopen in California. Compliance with these guidelines will often provide a defense against actions alleging that a business's operations constitute a nuisance.

California law provides that "Nothing which is done or maintained under the express authority of a statute can be deemed a nuisance." In interpreting this rule, courts have distinguished between governmental standards that authorize the activity being challenged and those that regulate the manner in which the activity must take place. Even if a statute authorizes an activity, courts have frequently held that a business can still be liable for nuisance if the manner in which that activity takes place creates a nuisance to its surrounding environment. But if the government has authorized both the activity and the specific manner in which that activity must take place with the intent that its authorization should displace traditional nuisance liability, then the courts may not interfere with the officially sanctioned activity.

Here, the reopening guidelines being adopted by federal, state and local governments vary widely in their specificity and mandatory effect. These guidelines are also updated frequently and often with little advance notice. In fact, Los Angeles County allowed restaurants to reopen before even issuing the guidelines that these restaurants were expected to follow. Clearly, it is a challenge for businesses to stay in compliance with all applicable guidelines. But if the controlling guidelines specifically dictate the manner in which businesses should conduct their operations to minimize COVID-19 exposures, compliance with these provisions should act to shield a company from tort liability. Even if a court finds that compliance is not dispositive, it would remain compelling evidence in determining whether a business acted unreasonably if a COVID-19 hot spot can be traced back to its operations. On the other hand, businesses should be cognizant that even complete compliance with reopening guidelines may not be sufficient to avoid liability if a court concludes that the guidelines are too vague or that greater precautions should have been taken. For that reason, industry standards will likely play a significant role in determining what actions should be considered reasonable.

In short, responding to and avoiding COVID-19 lawsuits require a comprehensive strategy, applying well-established legal precedents to a rapidly changing social and economic landscape.

Matt Wickersham is a partner at Alston & Bird LLP in Los Angeles in the firm's Environment, Land Use & Natural Resources group. He handles a wide range of matters involving environmental regulation and mass tort litigation, including claims of environmental contamination, personal injury, wrongful death and nuisance liability.