In a recent August 2020 decision, the Supreme Court of Massachusetts in. (SJC-12856) determined that molestation policy exclusions do not preclude coverage arising out of alleged assault in personal injury claims. The Court found that the term “physical abuse” was ambiguous in a homeowner’s insurance policy and a personal injury claim arising out of a physical altercation was not sufficient to trigger an abuse and molestation policy exclusion for the coverage of a bodily injury claim.

Background

On September 13, 2014 Timothy Krusell, who was 23 years old at the time, was with a friend when he struck up a conversation with Robert Christian Haufler, age 62, and his companion. The conversation became heated and Krusell pushed Haufler, causing him to lose his balance and fall onto a parked automobile before striking the pavement. Krusell fled the scene and Haufler suffered broken bones and other injuries that resulted in permanent damage to his right arm. Haufler filed a civil action against Timothy Krusell and Dorchester Mutual, the homeowners’ insurance carrier of Krusell’s parents (“the Krusells”).  Dorchester Mutual agreed to defend the claim under a reservation of rights, citing to a coverage exclusion in the Krusells’ insurance policy relating to “intentional acts.”

The Krusells requested that Dorchester Mutual participate in settlement negotiations, however, Dorchester Mutual declined to participate in on the grounds that it had insufficient information to determine whether the claim will be denied. The Krusells settled the claim for $750,000, anticipating that Dorchester Mutual would cover $500,000 under their insurance policy. Dorchester Mutual commenced a declaratory judgment action seeking a judgment that it had no duty to indemnify the Krusells under the terms of their homeowners’ insurance policy, and the Krusells brought a counterclaim against Dorchester Mutual, arguing that its refusal to participate in settlement discussions constituted a breach of contract, a breach of the implied covenant of good faith and fair dealing, and a violation of G.L.c. 93A and G.L.c. 176D.

Continue Reading Can Physical Abuse Be Sufficient to Preclude Insurance Coverage Under an Abuse and Molestation Policy Exclusion?

As the COVID-19 pandemic continues to sweep across the United States and the world, it affects every industry and sector of business, including the cruise ship industry. Earlier this year, television and print media were littered with stories and videos of cruise ships quarantined at sea with passengers and crew unable to dock at port and return home. As the full scope of the pandemic came into view, the cruise ship industry, including Carnival and Royal Caribbean, were forced to cancel upcoming voyages under guidelines promulgated by the Center for Disease Control (CDC) including its “No Sail Order for Cruise Ships.” See https://www.cdc.gov/quarantine/cruise/index.html.

On top of that, there have been reports that more than 1,500 people were diagnosed with COVID-19 following cruises, and allegedly 39 people have died from COVID-19 following their trips on cruises run by Carnival Corporation and its subsidiaries. Numerous lawsuits were filed on behalf of injured plaintiffs against cruise lines throughout the United States. For example, two different classes of cruise passengers filed lawsuits against Carnival Corporation. Continue Reading Effects of COVID-19 on the Cruise Ship Industry and Legal Ramifications on Other Sectors

Approximately three months into the unprecedented pandemic that drastically altered the way of life worldwide, states cautiously began lifting stay-at-home orders. California, one of the states hit hardest by the COVID-19 pandemic, was among these states. The gradual reopening of California’s economy was cut short as a spike in COVID-19 cases in early July 2020 resulted in Governor Gavin Newsom ordering that certain businesses with indoor operations, such as restaurants and movie theaters, cease indoor operations “which promote the mixing of populations beyond households and make adherence to physical distancing and wearing face coverings difficult.[i]” Indeed, the risk of contracting the virus is undoubtedly at the forefront of the minds of both employers and employees as they return to their places of employment. This article explores some of the issues posed by COVID-19 in the context of recent changes to California’s workers’ compensation laws and the impact of these changes on employers, as well as issues concerning employers’ potential exposure to litigation for COVID-19 related claims.

1. A Brief Overview of the California Workers’ Compensation Act

California’s workers’ compensation laws are codified in Labor Code §§ 3200-6200, referred to as the Workers’ Compensation Act. The primary purpose of California’s workers’ compensation statutes is to insure that an injured employee and his or her dependents have adequate means of sustenance while the employee is unable to work[ii]. The laws also promote the employee’s prompt recovery so that he or she can return to the workforce[iii]. Accordingly, the burden of caring for the injured worker and his or her dependents is shifted from society to industry, which assumes the responsibility as a cost of doing business[iv]. The provisions of the Workers’ Compensation Act must be liberally construed in the employee’s favor, and all reasonable doubts as to whether an injury arose out of employment are to be resolved in favor of awarding the injured employee compensation[v].

In order to be eligible for workers’ compensation benefits under California law, two conditions must be present: (1) an employer-employee relationship[vi] and (2) an injury suffered by an employee that arises out of and in the course of the employment relationship[vii].

California defines an employee as every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed[viii]. Any person rendering service for another is presumed to be an employee[ix]. Independent contractors, defined as any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished[x], are specifically exempted from this presumption[xi].

For an injury to arise out of the employment, it must occur by reason of a condition incident to the employment[xii]. That is, the employment and the injury must be linked in some causal fashion[xiii]. However, such connection need not be the sole cause of the injury; it is sufficient if the employment is a contributory cause of the injury[xiv]. The employee has the burden of proof by a preponderance of the evidence[xv]

2. Changes to the Workers’ Compensation Act in Response to COVID-19

In response to the pandemic, California Governor Gavin Newsom issued a statewide stay-at-home order on March 19, 2020, applicable to all residents except those needed to maintain continuity of operations of essential critical infrastructure sectors[xvi]. In accordance with this order, the State Public Health Officer designated categories of “Essential Critical Infrastructure Workers” that are exempted from the stay-at-home order, which range from healthcare and emergency services, sanitation, construction, financial services, and food and agriculture services[xvii].

On May 6, 2020, Governor Newsom, recognizing that essential workers are at an increased risk of contracting COVID-19, issued an Executive Order that creates a rebuttable presumption that an employee’s diagnosis of COVID-19 related illness arose out of the course of employment for purposes of awarding workers’ compensation if certain conditions are met[xviii]. These conditions include the following:

  1. The employee tested positive for or was diagnosed with COVID-19 within fourteen (14) days after a day that he or she performed labor or services at the place of employment at the employer’s direction;
  2. The day referenced in subparagraph (a) on which the employee performed labor or services at the place of employment at the employer’s direction was on or after March 19, 2020;
  3. The place of employment was not the employee’s home or residence; and
  4. The diagnosis of a COVID-19 related illness was done by a physician who holds a physician and surgeon license issued by the California Medical Board, and that diagnosis is confirmed by further testing within 30 days of the date of the diagnosis[xix].

The Executive Order is expressly limited to diagnosed cases between March 19, 2020 and July 5, 2020[xx]. An employer may introduce evidence to rebut or dispute the presumption within 30 days after the claim is filed[xxi]. Unless the employer can produce evidence to rebut the presumption during that time frame, the injury is presumed to be compensable[xxii]. After the 30 day period, an employer can only dispute the claim using new evidence discovered more than 30 days after filing[xxiii].

3. Effect of Executive Order N-62-20 on California Employers’ Rights and Duties Under the Workers’ Compensation Act

Employers are understandably concerned about the changes to existing law created by the Executive Order and its potential impact on their operations, both logistically and financially. Key changes that merit consideration are discussed below.

The most drastic change created by the Executive Order that establishes the rebuttable presumption of causation is that it effectively removes an employee’s burden of producing evidence of a work-related injury before he or she becomes eligible for benefits. Instead, the burden is shifted to the employer, who must prove that the work performed by the employee was not the cause of the illness. This can be very difficult to prove, as it would involve thorough investigation of an employee’s activities outside of work, which can be time-consuming, costly, and potentially encroach on an employee’s privacy rights. Additionally, the Executive Order is silent as to the type of evidence that can be introduced to rebut the presumption that the COVID-19 related illness was work-related.

Furthermore, under the Executive Order, an employer’s period to deny a claim is significantly cut short, from 90 days under the Labor Code, to just 30 days from the date the claim form is filed[xxiv]. Therefore, employers must report any COVID-19 claims to their insurance carriers to avoid missing this crucial deadline.

Governor Newsom’s Executive Order is silent as to the definition of a “COVID-19 related illness,” despite the term appearing prevalently throughout the text of the document. While a diagnosis of COVID-19 seemingly satisfies the requirements set forth under the Executive Order, it is unclear as to what “related illnesses” qualify, which will undoubtedly create confusion as to eligibility of claims.

The Executive Order is also silent as to the type of employees who can claim the presumption. As California enters Stage 2 of the Governor’s Pandemic Roadmap to reopening California’s economy, businesses previously deemed “non-essential” are beginning to transition their employees back to work. Although the Order was originally issued to protect specific categories of workers deemed “essential” to the State’s infrastructure, the Executive Order covers all COVID-19 related illness claims through July 5, 2020. Therefore, claims by “non-essential” employees, which were not previously contemplated by the Executive Order, will fall within its purview, which is ostensibly at odds with the Governor’s intent in issuing the order. The California Workers’ Compensation Ratings Bureau estimates that the presumption created by Executive Order No. N-62-20 for claims by essential workers will cost between $2.2-33.6 billion[xxv]. Considering that this calculation did not take into account claims by non-essential workers, the potential cost is disconcerting for many California employers who are concerned about increases in workers compensation insurance premiums as a result of the presumption. Indeed, in the month following the Governor’s issuance of the Executive Order, over 5,000 California employees filed COVID-19 related workers’ compensation claims.[xxvi]

Lastly, the Executive Order also provides that compensation shall extend to all workers’ compensation benefits generally available to claims by injured workers under existing laws[xxvii]. Sick employees must exhaust their state and federal sick leave benefits before they are eligible for temporary disability benefits under workers’ compensation laws[xxviii].

4. Employer Liability In the Event that an Employee Contracts COVID-19 While Working

Courts have interpreted the rule of liberal construction to require that the statutes are liberally construed in favor of awarding workers’ compensation, not in favor of permitting civil litigation[xxix].

In California, with limited exceptions, the right to recover benefits under the Workers’ Compensation Act is “the sole and exclusive remedy” of the employee or his or her dependents against the employer[xxx]. The exclusive remedy rule prevents not only employees, but also their dependents, from bringing civil actions against employers[xxxi].

The following are the statutory exceptions to the exclusive remedy rule under the Workers’ Compensation Act:

(1)       Willful physical assault by the employer

(2)       Aggravation of the employee’s injury by the employer’s fraudulent concealment of the existence of the injury and its connection with the employment;

(3)       Injuries proximately caused by a defective product manufactured by the employer that is thereafter provided for the employee’s use by a third person[xxxii].

Additionally, an employer who fails to secure workers compensation insurance can be sued in tort by an employee or his or her dependents[xxxiii].

Employers abiding by California’s workers’ compensation insurance requirements are not necessarily insulated from lawsuits filed by employees for damages arising from work-related exposure to COVID-19. Although the situations in which an employer can be sued in civil court outside of the workers’ compensation system are limited, employees may attempt to rely upon an exception to the exclusive remedy rule to seek compensation outside of the Workers’ Compensation system to maximize their potential recovery.

The liberal construction of the Workers’ Compensation Act in favor of extending benefits has been applied to cases involving the exclusive remedy rule, even when the employee is seeking to avoid workers’ compensation coverage[xxxiv]. In other words, application of the remedies afforded to employees by the Workers’ Compensation Act is the exception, not the rule. Accordingly, the exclusions under the Workers’ Compensation act are construed narrowly. In the context of COVID-19, fraudulent concealment is the exception that appears most susceptible to an influx of litigation. For example, an employee who contracts a COVID-19 related illness may allege that he or she in the course and scope of their employment was exposed to another employee whom the employer knew or should have known had been infected with the virus.

To recover under California’s fraudulent-concealment exception to the exclusivity of workers’ compensation, an employee must prove that the employer knew of his work-related injury, the employer concealed that knowledge from him, and the injury was aggravated as a result of such concealment[xxxv]. If any one of these conditions is lacking, the exception does not apply[xxxvi]. This fraudulent-concealment exception is an extremely limited one[xxxvii]. Courts have emphasized that this exception to exclusive remedy rule would apply to few situations[xxxviii].

The fraudulent concealment exception is widely used in toxic tort matters, which involve alleged exposures over an extended period of time that resulted in latent diseases. Courts in these cases have held that causes of action for fraudulent concealment are barred by the exclusive remedy provisions of the Workers’ Compensation Act even if the employer is alleged to have induced the employee to accept employment by representing the workplace would be safe[xxxix]. Otherwise, the purpose of the entire workers’ compensation system would be undermined[xl]. Even in cases which allege that the employer failed to provide appropriate controls and personal protective equipment, the Courts have drawn a distinction between “exposure” and “injury,” and held that the former cannot support an exception to the workers’ compensation laws for fraudulent concealment[xli].

Even if an employee successfully pursues the fraudulent concealment exception in a civil action, it is important to note that this does not allow him or her to convert a workers’ compensation claim into a tort claim[xlii]. The exception only allows recovery for the aggravation of the personal injury caused by the concealment. Recovery for damages “from contracting the disease in the first instance” can only be obtained through the workers’ compensation program[xliii]. While it is too early to tell whether a COVID-19 related injury allegedly resulting from an exposure in the workplace will result in claims that may fall within the fraudulent concealment exception to the Workers’ Compensation Act, the potential for such a claim certainly exists.

5. Enforceability of Liability Waivers Related to COVID-19 Related Litigation

In California, an individual may waive the advantage of a law intended solely for his or her benefit, but a law established for a public reason cannot be contravened by a private agreement[xliv]. California courts have interpreted the legal theory underlying the Workers’ Compensation Act is a presumed “compensation bargain,” wherein the employer assumes liability for industrial personal injury or death without regard to fault in exchange for limitations on the amount of that liability[xlv]. 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[xlvi]. In turn, society as a whole is relieved of the burden of caring for the injured workman and his family, and the burden is placed upon the industry as a cost of doing business[xlvii]. It then follows that California’s workers’ compensation laws are firmly grounded in public policy. Requiring employees to waive workers’ compensation claims as a precondition of returning to work may be interpreted as violating public policy. California law is unequivocal and well settled in that contracts that contravene public policy are illegal and unenforceable[xlviii].

Additionally, courts may interpret these waivers as unconscionable contracts of adhesion. These types of contracts, which are heavily disfavored, are typically imposed and drafted by the employer, the party of superior bargaining strength, and relegate to the employee only the opportunity to adhere to the contract or reject it[xlix].

6. Steps an Employer May Take to Avoid the Risk of COVID-19 Related Workers’ Compensation Claims

Employers may take several proactive measures to safeguard their businesses and employees and limit exposure to COVID-19 related workers’ compensation claims. The most important step employers should take is to ensure they have an active workers’ compensation insurance policy in place that complies with the requirements of Labor Code § 3700 et seq. Employers should also make every effort to expediently report any COVID-19 related claims to their workers’ compensation insurance carriers to ensure they comply with the shortened deadlines imposed by the Governor’s Executive Order. An employer’s failure to timely deny or investigate COVID-19 workers’ compensation claims could significantly impact their ability to defend against the rebuttable presumption created by the Executive Order.

Employers should also work with in-house or outside counsel to review their existing safety policies, procedures to ensure they address the risks of COVID-19 exposure to employees and supplement these practices with new protocols aimed at minimizing the risk of exposure where necessary.

On May 14, 2020, California’s Division of Occupational Safety and Health (“Cal/OSHA”) issued its “Interim General Guidelines on Protecting Workers from COVID-19.” While this interim guidance does not impose new legal obligations on California employers, it provides employers and workers with information for preventing exposure to COVID-19 in the workplace. Cal/OSHA’s guidelines include, but are not limited to the following:

  1. Actively encourage sick employees to stay home.
  2. Immediately send employees home or to medical care, as needed, if they have a frequent cough, fever, difficulty breathing, chills, muscle pain, headache, sore throat, or recent loss of taste or smell.
  3. Ensure employees who are out ill with fever or acute respiratory symptoms do not return to work until both of the following occur:
    1. At least three full days pass with no fever (without the use of fever-reducing medications) and no acute respiratory illness symptoms; and
    2. At least 10 days pass since the symptoms first appeared.
  4. Encourage employees to telework from home when possible.
  5. Practice physical distancing by cancelling in-person meetings, using video or telephonic meetings, and maintaining a distance of at least 6 feet between persons at the workplace when possible.
  6. Provide employees with personal protective equipment, such as face masks and gloves[l].

Employers should also review all applicable guidelines issued by the public health departments of the municipality and/or county of their place of business, as well as any industry-specific guidelines promulgated by state and federal regulatory authorities to ensure compliance prior to returning their employees to work.

Given the recent spike in cases, employers must remain vigilant of the potential for COVID-19 related claims. Employers should take every precaution to ensure their operations are compliant with local, state, and federal guidelines that are aimed at minimizing their employees’ exposure to the virus, such as face coverings and social distancing. Taking proactive measures to safeguard employees from COVID-19 related illnesses offer the best protection for employers seeking to minimize the risk of workers’ compensation claims during the ongoing pandemic. Additionally, employers should consult trusted counsel to review potential pitfalls that could lead claims by employees that may fall outside the workers’ compensation system and develop a strategy for addressing the same.

 

[i] https://www.cdph.ca.gov/Programs/OPA/Pages/NR20-143.aspx

[ii] Bussear v. Workers’ Comp. Appeals Bd. (1986) 181 Cal. App. 3d 186, 189.

[iii] Id.

[iv] Id.

[v] Labor Code § 3202; Wright v. State of California (2015) 233 Cal. App. 4th 1218, 1229.

[vi]Labor Code § 3600

[vii] Cty. of Los Angeles v. Workers’ Comp. Appeals Bd. (1981) 30 Cal. 3d 391, 396.

[viii] Labor Code § 3351

[ix] Labor Code § 3357

[x] Labor Code § 3352

[xi] Labor Code § 3357; See also Labor Code § 5705 (providing an employer an affirmative defense based on claim that a worker was an independent contractor or “or otherwise excluded” from the Workers Compensation Act.)

[xii] Maher v. Workers’ Comp. Appeals Bd. (1983) 33 Cal. 3d 729, 733.

[xiii] Id.

[xiv] Id.

[xv] Labor Code, § 3202.5; McAllister v. Workmen’s Comp. Appeals Bd. (1968) 69 Cal. 2d 408, 416.

[xvi] Executive Order N-33-20 (https://covid19.ca.gov/img/Executive-Order-N-33-20.pdf)

[xvii] Essential Workforce https://covid19.ca.gov/img/EssentialCriticalInfrastructureWorkers.pdf

[xviii] Executive Order N-62-20 (https://www.gov.ca.gov/wp-content/uploads/2020/05/5.6.20-EO-N-62-20-text.pdf)

[xix] Id.

[xx] Id.

[xxi] Id.

[xxii] Id.

[xxiii] Id.

[xxiv] Labor Code § 5402

[xxv] Cost Evaluation of Potential Conclusive COVID-19 Presumption in California’ Workers’ Compensation (https://www.wcirb.com/sites/default/files/documents/wcirb_april_2020_cost_evaluation_of_conclusive_covid-19_presumption.pdf)

[xxvi] https://calmatters.org/economy/labor/2020/06/covid-workers-comp-compensation-claims-california-lockdown/

[xxvii] Id.

[xxviii] Id.

[xxix] King v. CompPartners (2018) Inc., 5 Cal. 5th 1039, 1051.

[xxx] Labor Code, § 3602, subd. (a)

[xxxi] Id.

[xxxii] Labor Code, § 3602, subd. (b)

[xxxiii] Labor Code, §§ 3706, 3602, subd. (d)

[xxxiv] Shoemaker v. Myers (1990) 52 Cal. 3d 1, 19.

[xxxv] Silas v. Arden (2012) 213 Cal. App. 4th 75, 91

[xxxvi] Jensen v. Amgen, Inc. (2003) 105 Cal. App. 4th 1322, 1324

[xxxvii] Id. at 1324.

[xxxviii] Id. (“[W]e cannot believe that many employers will aggravate the effects of an industrial injury by not only deliberately concealing its existence but also its connection with the employment.”)

[xxxix] Spratley v. Winchell Donut House, Inc. (1987) 188 Cal. App. 3d 1408, 1412–13.

[xl] Id. at 1413. (“The reason for the foregoing rule seems obvious. It is not uncommon for an employer to ‘put his mind’ to the existence of a danger to an employee and nevertheless fail to take corrective action. [Citation.] In many of these cases, the employer does not warn the employee of the risk. Such conduct may be characterized as intentional or even deceitful. Yet if an action at law were allowed as a remedy, many cases cognizable under workers’ compensation would also be prosecuted outside that system. The focus of the injury in a case involving work-related injury would often be not whether the injury arose out of and in the course of employment, but the state of knowledge of the employer and the employee regarding the dangerous condition which caused the injury. Such a result would undermine the underlying premise upon which the workers’ compensation system is based.”)

[xli] Foster v. Xerox Corp. (1985) 40 Cal. 3d 306, 311; Rodriguez v. United Airlines Inc. (N.D. Cal. 2013) 5 F. Supp. 3d 1131, 1137.

[xlii] Foster v. Xerox Corp. supra, 40 Cal.3d at 310.

[xliii] Id.

[xliv] Civil Code § 3513.

[xlv] Shoemaker v. Myers supra, 52 Cal. 3d at 16.

[xlvi] Id.

[xlvii] Bussear v. Workers’ Comp. Appeals Bd. supra, 181 Cal. App. 3d at 189.

[xlviii] Abramson v. Juniper Networks, Inc. (2004) 115 Cal. App. 4th 638, 658.

[xlix] Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal. App. 4th 74, 84.

[l] Cal/OSHA Interim General Guidelines on Protecting Workers from COVID-19 (https://www.dir.ca.gov/dosh/coronavirus/General-Industry.html)

 

 

As of July 20, 2020, the Centers for Disease Control and Prevention reported more than 3.7 million COVID-19 cases, resulting in more than 140,000 deaths.  The virus is primarily transmitted person-to-person by droplets, aerosols and fomites. Nursing homes, rehabilitation and long-term care centers and facilities caring for people with psychiatric disabilities assist persons of a wide range of ages, but the majority of residents are elderly. Individuals that require the services of these facilities are particularly vulnerable to respiratory pathogens such as the influenza virus and present environments conducive to infections which can be introduced into these facilities by staff, visitors and new residents with devastating consequences.

Nursing home residents account for nearly one in ten of all COVID-19 cases in the United States and more than a quarter of the deaths.[1]  Data shows that nursing homes have been overwhelmed by the effects of the virus. Nursing homes hold large populations of elderly residents many of whom have compromised immune systems due to pre-exiting medical conditions and age. Given the typical living arrangements which place patients and residents within close proximity to one another and caregivers supporting numerous individuals in the same facility, nursing homes and long-term care facilities present substantial opportunities for the spreading of infections. Nursing homes frequently provide a community-based atmosphere, consisting of “family” meals, entertainment, fitness classes, group activities such as card or board games, and a general encouragement of social interaction.

Within high-risk groups of our population, these environments and related activities offer the perfect opportunity for a virus such as COVID-19 to spread if proper precautions, including social distancing and enhanced hygiene protocols, are not established, initiated and followed. The CDC has set out specific guidance and recommendations for Nursing Homes & Long-Term Care Facilities to address potential COVID-19 exposures.[2]  Failure to follow a prevention and control program in these settings can result in illness, death and litigation.  Oversights in the prevention and control of COVID-19 ultimately leads to potential legal exposure for nursing homes, long-term care facilities, individual healthcare providers, service providers and contractors that provide dining or cleaning services, as well as the individual employees themselves at a higher risk for becoming the target of litigation.

An example of the potential scope of legal liability faced by nursing homes and similar facilities as a result of the pandemic can be seen in a proposed class action filed in the United States District in Massachusetts pursuant to the Fourteenth Amendment and 42 U.S.C. § 1983.  Sniadach, et. al. v. Walsh, et. al., stems from COVID-19 infections and deaths afflicting 160 Veterans that resided at the Soldiers’ Home in Holyoke, Massachusetts resulting in the deaths of 76 Veterans.  The proposed class action alleges that the Soldiers’ Home, its management and staff failed to follow proper COVID-19 procedures.

The Holyoke facility was investigated and a report entitled “An Independent Investigation Conducted for the Governor of Massachusetts” was published on June 23, 2020 which examines the causes of the outbreak.[3]  The report lists alleged errors made by the Soldiers’ Home leadership team which included:

  • combining two locked dementia units housing Veterans with a mix of COVID-19 conditions;
  • failing to ensure an appropriate standard of care within the combined unit;
  • failing to promptly isolate patients suspected of COVID-19 even though rooms were set aside for isolation;
  • allowing delays in testing additional Veterans for COVID-19 when they were showing symptoms;
  • delays in closing common spaces;
  • failing to stop rotation of staff among units;
  • inconsistent policies and practices with respect to personal protective equipment; and
  • various recordkeeping and documentation failures.

Sniadach was brought as a Federal civil rights action under §1983 against a series of individual defendants including the former Superintendent, the former Chief Nursing Officer and the former Assistant Director of Nursing of the Soldiers’ Home as well as the former Massachusetts Secretary of Veterans’ Affairs.  The Complaint alleges that the defendants “showed deliberate indifference “to the basic needs of the veterans at the Soldiers Home.

The deliberate indifference standard is a necessary component to any claim for monetary damages under §1983 against individual government employees who would otherwise be shielded from liability under the Federal Tort Claims Act (“FTCA”).[4]  The legal approach and scope of the allegations in the Sniadach complaint focus on the acts and omissions of the individually named defendants apparently both to circumnavigate the pre-suit procedural requirements of the FTCA and in an effort to defeat a “qualified immunity” defense[5] which still looms as a hurdle that the plaintiff must overcome with respect to the §1983 claims for monetary damages.[6]

Lawsuits have been filed across the country against privately run nursing homes and long-term care facilities relating to injuries and deaths stemming from the COPVID-19 pandemic.  Litigation has been filed in California, Illinois, North Carolina, and Washington. Many theories of liability apply to these COVID-19 based lawsuits including, but not limited to, negligence, wrongful death, willful and wanton misconduct, fraudulent misrepresentation, and violations of various local, state, and federal laws, seeking a variety of relief, including punitive damages in some matters.

  • The People of the State of California v. Lakeview Terrace Skilled Nursing Facility LLC, d/b/a Lakeview Terrace, et al., Case No. 20STCV25436, was filed in the Superior Court of the State of California, in the County of Los Angeles. This matter involves alleged acts and omissions during the COVID-19 pandemic brought by the People of the State of California seeking a permanent injunction, civil penalties, restitution, and other legal and equitable relief, claiming an intentional violation of an injunction, unfair competition, violations of local, state, and federal law, a failure by the facility to report abuse and neglect as well as a failure to maintain adequate records.
  • Pamela Colwell, as Administrator of the Estate of Helen A. Osucha, deceased, v. Geneva Nursing and Rehabilitation Center, LLC d/b/a Bria Health Services of Geneva, Case. No. 20-L-000244, was filed in the Circuit Court of Sixteenth Judicial Circuit, in Kane County, Illinois. The Plaintiff administrator of her late mother’s estate filed suit against her late mother’s nursing home seeking monetary relief alleging violations of the Illinois Nursing Home Care Act (210 ILCS/Art. I), negligence, willful and wanton misconduct, and wrongful death after her mother passed away from complications associated with COVID-19.
  • Vanessa Sherod, as Administrator of the Estate of Elizabeth Wiles and in her own right, v. Comprehensive Healthcare Management Services, LLC d/b/a Brighton Rehabilitation and Wellness Center, et al., Case No. GD-20-007319, was filed in the Court of Common Pleas of Pennsylvania, in Allegheny County. The Plaintiff administrator of her mother’s estate seeks compensatory and punitive damages alleging negligence, fraudulent misrepresentation, intentional misrepresentation, and wrongful death.  Suit was filed against the nursing home, its management agency, the owners of the nursing home, and the housekeeping and laundry service for Brighton Rehabilitation as well as an employee.
  • Deborah de Los Angeles, individually and as Daughter and Personal Representative of the Estate of Twilla June Morin, v. Life Care Centers of America, Inc. d/b/a Life Care Center of Kirkland, a foreign corporation, et al., Case No. 20-2-07689-9, was filed in the Superior Court for King County in the State of Washington. The Plaintiff is the personal representative of her late mother’s estate alleges violations of the state’s Abuse of Vulnerable Adults Act (Chapter 74.34 RCW), negligence, fraud, fraudulent concealment, and negligent misrepresentation.  The Defendants include the nursing home, its management agency, the director of Life Care Center, the Vice President of Operations for Life Care Centers, and other staff members and health care providers who oversaw the care provided to the Plaintiff’s late mother.

Members of the country’s population that require substantial daily (and perhaps hourly) care, assistance and monitoring due to health issues are inherently at-risk even in the absence of the threats posed by a global pandemic such as COVID-19.  COVID-19 substantially raises the threat level for this segment of our population far beyond the dangers associated with influenza.  The scope of the potential health risks and corresponding exposure to legal liability will only increase. There are approximately 15,600 nursing homes across the United States, holding 1.3 million Civilians and Veterans alike.[7]  By 2050 the Census Bureau projects that the number of Americans age 65 and older will be 88.5 million.[8]

At the same time that the health, and in fact the life, of America’s at-risk population dependent upon comprehensive care housed in nursing homes and other healthcare facilities, nursing homes and other healthcare facilities are severely threatened by potential liability over COVID-19 related claims. Along with an increase in COVID-19 illnesses, such facilities along with the owners, managers and employees of the facilities are faced with an exponential increase in legal liability.  Some states have taken steps to limit or immunize the threat of litigation.

For example, as early as mid-April, Governor Baker of Massachusetts signed into law “An Act to Provide Liability Protections for Health Care Workers and Facilities During the COVID-19 Pandemic.”[9]  The law immunizes state and private hospitals, skilled nursing facilities, assisted living residences, rest homes, community health centers and other facilities along with healthcare professionals “in the course of providing healthcare services” during the pandemic from both lawsuits and liability unless the damages were “caused by an act or omission constituting gross negligence, recklessness or conduct with an intent to harm or to discriminate based on race, ethnicity, national origin, religion, disability, sexual orientation or gender identity by a health care facility or healthcare professional.”

A provision tracking the Massachusetts law was signed by Governor Cuomo of New York as part of the state’s annual budget.  Other states including, Connecticut, Kentucky, New Jersey, North Carolina, and Pennsylvania and Oklahoma have enacted similar legislation and certain governors such as Governor Pritzker of Illinois have issued executive orders with similar effect.  Legal challenges to these statutes and executive orders should be expected along with legislative initiatives to repeal such laws.  The balancing act of protecting the health of those Americans with the highest risk of harm from COVID-19 against the legal risk to healthcare facilities and providers will undoubtedly continue well into the future.

 

[1] https://www.nbcnews.com/health/health-news/government-counts-26-000-covid-19-deaths-nursing-homes-s-n1221496

[2] https://www.cdc.gov/coronavirus/2019-ncov/hcp/long-term-care.html

[3] https://www.mass.gov/doc/report-to-governor-baker-re-holyoke-soldiers-home/download

[4] Individual government employees are immune from suit under the FTCA for “tort” claims. See 28 U.S.C. § 2679(b)(2).

[5] Government officials engaged in performing “discretionary functions” are shielded from liability for civil damages and immunity from suit, generally speaking, unless their conduct violates a clearly established constitutional right of which a reasonable person in the position of the official would have known. See Harlow v. Fitzgerald, 457 U.S. 183, 191 (1984); see also Stamps v. Town of Framingham, 662 F.3d 100, 104-05 (1st Cir. 2011); J.R. v. Gloria, 593 F.3d 73 (1st Cir. 2010).  Qualified immunity is a question of law to be decided by the court in the early phases of the proceedings because, if the defense is available, it is immunity from suit and not just a defense to liability. Mitchell v. Forsyth, 472 U.S. 511, 526 (1985); Tatro v. Kervin, 41 F.3d 9, 15 (1st Cir. 1994).

[6] See Anderson v. Creighton, 43 U.S. 635, 640 (1987); see also Ahmad v. Department of Correction, 446 Mass. 479, 44 (2006).  Although likely not an applicable concern in Sniadach, it is common for private facilities to incorporate mandatory dispute and claim arbitration clauses into contracts for care. Mandatory arbitration clauses, in most circumstances and jurisdictions, are recognized as valid and enforceable under both the Federal Arbitration Act and parallel state statutes. See e.g., GGNSC Administrative Services, LLC v. Schrader, 484 Mass. 181 (2020) (interpreting application of Massachusetts law to enforce mandatory arbitration clause in nursing home contractual agreement in wrongful death suit).

[7] https://www.cdc.gov/nchs/fastats/nursing-home-care.htm

[8] It is expected that nearly a third of the population in Europe will be over 60 years old by 2050. See World Health organization Report on Ageing and Health (2015).

[9] Chapter 64 the Acts of 2020.

On July 15, 2020, the Massachusetts Appeals Court affirmed a Superior Court decision allowing the Defendants’ motion to dismiss under Rule 12(b)(6) with respect to the Plaintiff’s employment-based claims stemming from an alleged constructive discharge brought against Lowell General Hospital and the Plaintiff’s supervisors. Kelleher v. Lowell General Hospital, 96 Mass. App. Ct. 49 (2020). The Plaintiff’s complaint involved allegations of: (1) constructive discharge; (2) defamation; (3) intentional interference with advantageous business relations; (4) intentional infliction of emotional distress; and (5) breach of the implied covenant of good faith and fair dealing.

The Plaintiff claimed that she endured months of intolerable working conditions at Lowell General Hospital, which she described as “daily, unprovoked angry and humiliating outbursts” and that these conditions ultimately led to her resignation, which constituted constructive discharge. The Plaintiff identified three specific occurrences in which she was berated or humiliated by her supervisor in front of co-workers and patients. Two of the instances were connected to scheduling issues and the last outburst was in response to Plaintiff’s inability to help her supervisor with a patient because she was busy with her own work. The third incident involved Plaintiff’s supervisor allegedly shouting “you never help!” in front of patients and co-workers.

Constructive discharge does not constitute a distinct cause of action under Massachusetts law, but can be an element of a viable wrongful termination employment claim stemming from a well-defined public policy or a contractual right. The Plaintiff was an “at-will employee,” defined as an employment relationship in which either the employer or employee may terminate the employment at any time without cause, for any reason, except for a reason proscribed by statute or public policy. M.G.L. c. 151B et seq.; Fortune v. National Cash Register Co., 373 Mass. 96, 101 (1977); Wright v. Shriners Hosp. for Crippled Children, 412 Mass. 469, 472 (1992). Well-established Massachusetts law, continually affirmed by Massachusetts appellate courts, demonstrates that an at-will employee can be terminated at any time “for almost any reason or for no reason at all.”[1]

The Plaintiff’s defamation claim failed because the two statements described in the Plaintiff’s complaint, consisting of “you never help!” and “I’m done with her,” were found to be either a subjective state of mind or “rhetorical hyperbole,” that cannot be reasonably understood to be a statement of actual fact or one that implies defamatory facts. A viable defamation claim requires a plaintiff to show that: (1) a false statement was made to a third party; (2) of and concerning the plaintiff; that (3) is capable of damaging plaintiff’s reputation in the community; and (4) either caused plaintiff economic loss or is actionable without proof of economic loss.

The elements of a claim for intentional tortious interference with advantageous business relations are: (1) the plaintiff had a contract or advantageous business relationship with a third party; (2) the defendant knowingly induced the third party to break the contract or to forego the business relations; (3) the defendant’s interference was improper in motive or means; and (4) the plaintiff was harmed by the interference. In the case of an at will-employee making such a claim under Massachusetts law against a supervising employee, a plaintiff is also required to prove that the supervisor acted with actual malice and that the malice was the “controlling factor” in defendant’s conduct. Additionally, the plaintiff must prove that the defendant’s purpose was unrelated to any corporate interest. The Appeals Court in Kelleher noted that the three instances described by Plaintiff all arose out of work-related issues and the Plaintiff failed to allege specific facts that the individual defendants acted with actual malice.

Finally, the Court disposed of Plaintiff’s claims for intentional infliction of emotional distress and breach of the covenant of good faith and fair dealing with little discussion. The Plaintiff made no argument in support of her claim for breach of the covenant of good faith and fair dealing. As for the intentional infliction of emotional distress claim, the Court noted that the actions alleged “are not different in kind from many actions encountered in the workplace that while regrettable, are a not uncommon expression of the human condition.”

The Plaintiff’s claims arose from conduct that is considered typical workplace bullying and while the conduct was not considered unlawful by the Massachusetts Appeals Court, the decision should not be interpreted by employers to afford some false sense of security moving forward. Anti-bullying statutes have been enacted in schools nationwide and there have been multiple bills proposed in the Massachusetts’ legislature over the past decade seeking to make workplace bullying and harassment unlawful without regard to protected class status. Most recently, the Senate Committee on Labor and Workforce Development referred Bill S.1072 “An Act Addressing Workplace Bullying, Mobbing and Harassment, Without Regard to Protected Class Status” favorably to the Senate Committee on Ways and Means.

As currently written, the Bill would create a private right of action for abusive conduct and an abusive work environment. Trends suggest that such a bill eventually might be codified into law in Massachusetts. If such a bill is eventually passed through the Massachusetts’ legislature, the “regrettable . . . not uncommon expression the human condition” described by the Kelleher Court, might evolve into unlawful workplace behavior and subject employers to significant damages. Employers are cautioned to address this type of behavior that traditionally was considered commonplace through training and the implementation of policies in advance of such a law not only to avoid litigation costs and damages, but also to create a healthy environment that fosters growth and open dialogue free from abuse of any kind.

 

[1] See Wright, 412 Mass. at 472; Kyle v. Massachusetts General Hosp., 61 Mass. App. Ct. 1118 (2004); Bennett v. Abiomed, Inc., 2020 WL 1429847, *9 (D. Mass. Mar. 24, 2020).